3 Stocks Trading at 52-Week Lows — Is This the Bottom?

Serinus Energy, Eagle Energy Trust and Partners REIT hit yearly lows.

The Motley Fool

The market is full of highs and lows and savvy investors know when to jump on a good deal. For these companies a week like this could turn into an opportunity for investors, if they can ride out the waves of the markets .

Serinus Energy (TSX: SEN)

Serinus Energy hit a new 52-week low of $2.61 on May 2. The company is an oil and gas producer with operations in Ukraine, Tunisia, Brunei, and Romania. The stock has taken a hit since updated production numbers fell from 5,088 boe/day in Q4 2013 to 4,873 boe/day in Q1 2014. This is in part to workover requirements in Tunisia, but the most troubling setbacks come from its Ukrainian operations. Serinus’ Olgovskoye oil wells make up 43% of its Ukrainian assets and are located deep in the troubled eastern part of the country, leaving investors uneasy of the security of the site.

Recent times of civil unrest are not a new problem for Serinus as it was forced to cease its operations in Syria since the escalation of its civil war. Serinus has also been forced to suspend operations in one of its wells in Brunei, after a piece of the “bottom hole assembly” became lodged in the test hole. This “Timmy fell in the well” incident is expected to cost the company $11.8 million as it attempts to figure out how the part became lodged.

Eagle Energy Trust (TSX: EGL.UN)

Another oil and gas company is on the block this week. Eagle Energy Trust not only hit a new 52-year low, it hit its lowest point ever since it began trading on the TSX in 2010. The stock fell to $4.92 on May 1. The company is based in Canada but all of its operations are based in the U.S., primarily in Texas.

Investors have grown a little weary of the company in the past week as unusual trading activity has drawn the attention of the TSX, which has notified the Investment Industry Regulator. Eagle Energy earlier announced that its Q1 results will be released on May 9 and rumors apparently began to emerge from behind the scenes. Rumors on what could be in the report led to the unusual trading activity. Eagle Energy denies being aware of any information that could spark the trading.

Back on April 17 the stock had its price target scaled back to $8.00 from $8.50 by equities researchers at CIBC. The company is offering a $0.09 monthly dividend.

Partners REIT (TSX: PAR.UN)

Partners REIT is an owner of 42 retail properties in five provinces. Not only has the company hit a new 52-year low, it also hit its lowest point since 2009, falling to $3.94 on May 2. The fall in the stock is a result of a whirlwind of activity which included a $90 million purchase of properties in Ontario from Holyrood Holdings, a $15 million financing commitment with a rate of 10% from a mortgage lender, the resignation of one of the three trustees (who was only on the job for 27 days), and a call from U.S. hedge fund Orange Capital (a concerned unitholder) for a forensic investigation into the REIT.

The concerns from Orange Capital are based on a belief that Partner REIT interm-CEO (and largest unitholder) Ron McCowan’s dealings with Holyrood Holdings (aka 18651000 Ontario Ltd.) represent a “related party transaction under applicable securities laws”. Orange Capital is basing this on the long history between McCowan and the owner of Holyrood Holdings and insinuates that McCowan was the president, director, and secretary of the numbered company that later became Holyrood Holdings.

Back on April 14, RBC Capital Markets had a price target of $5.50 on the company, before discontinuing coverage on the stock. On April 21 Brendon Abrams, a real estate analyst with M Partners lowered his price target to $4.00 after he had discussions about the same $90 million deal that Orange Capital is showing concern over.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Cameron Conway does not own any shares in the companies mentioned.

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