3 Stocks Trading at 52-Week Lows: Is Now the Time to Buy?

Silvercorp Metals, Absolute Software, and Karnalyte Resources have hit 52-week lows. Could this be the perfect time to invest?

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The market is full of highs and lows, and savvy investors know when to jump on a good deal. Could these three companies with 52-week lows be a good bet?

Silvercorp Metals

Vancouver-based Silvercorp Metals (TSX: SVM)(NYSE: SVM) hit a new 52-week low of $1.95 on May 23, 2014. This new low came a day after the company posted its Q4 results, which revealed a decreased output of 191,122 tonnes of ore and net income results in the red. Revenue for the quarter was $16 million, down from $33 million, while year-end revenue came in at $108 million, down sharply from $181 million in 2013. Production of silver fell 38%, lead 47%, and zinc 54%.

The income for Silvercorp looks just as dismal, with a Q4 loss of $4.6 million compared to a net profit of $8.3 million in Q4 2013. The year-end results were quite shocking, with a net loss of $48 million compared to the net profit of $42 million in 2013. Part of this loss is due a 31% decrease in the price of silver during the quarter.

Absolute Software

Digital security company Absolute Software (TSX: ABT) hit a new 52-week low of $5.85 on May 22, 2014. The stock has been slipping since its Q3 report came out two weeks ago. Revenue managed to climb by 15% to $24.1 million, from $20.9 million last year. Net income totaled $1.4 million, which, while not much, is better than the $500,000 loss in Q3 2013. Absolute may be in a position for some growth as it has just released its newest software, which enables full “bring your own device” capabilities for Mac, Windows, and Cisco Identity Service Engine. This will allow employees to connect their own devices to their business’ digital infrastructure.

Karnalyte Resources

Potash project developer Karnalyte Resources (TSX: KRN) fell to a new 52-week low of $1.05 on May 23, 2014. The company had two instances of bad news break a couple of weeks ago. First, on May 14, 2014, the company abruptly replaced its CEO; the next day it released its Q1 results, which reported a net loss of $1.2 million. This Q1 loss was a slight improvement over the $1.6 million loss the company saw in Q1 2013. Net working capital also took a slip to $45.9 million from $59.5 million, and cash on hand also dropped by $16 million from this point last year.

The stock fell off a cliff back on July 28, 2013, and has been riding out a steadily lowered price floor ever since. When you compare the 52-week high of $7.46 that the stock saw last May to its most recent price target of $1.10, this shows a company in need of some changes.

For these companies, a week like this could turn into an opportunity for investors if they can ride out the turbulence of the markets.

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.

More on Investing

Profit dial turned up to maximum
Tech Stocks

$1,000 Invested in Constellation Software Stock Would Be Worth This Much Today

Constellation Software (TSX:CSU) is trading above $2,000 today. Why this stock is so expensive, and is it worth buying?

Read more »

Dividend Stocks

Passive Income: 3 Top Canadian Stocks to Buy for Monthly Dividends

Companies such as Pembina Pipeline and Killam Apartment REIT pay investors monthly dividends, making them top bets for income-seeking investors.

Read more »

Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks
Stocks for Beginners

TFSA Investors: Top TSX Stocks to Buy With $6,000

Here are two safe, dividend-paying TSX stocks for your long-term portfolio.

Read more »

Gold medal

3 Growth Stocks That Could Be Huge Winners in the Next Decade and Beyond

Are you looking for growth stocks that could be huge winners in the next decade? Here are three top picks!

Read more »

Retirees sip their morning coffee outside.

Retirees: How to Make Over $95/Week in Passive Income TAX FREE!

Canadian retirees who are hungry for passive income should look to snag stocks like Sienna Senior Living Inc. (TSX:SIA) in…

Read more »

Man holding magnifying glass over a document

Where to Invest $500 in the TSX Right Now

Given the massive correction, long-term investors can start buying stocks like Shopify and goeasy to outpace the broader markets by…

Read more »

Aircraft wing plane

Air Canada Stock Is a Fantastic Deal Right Now

Air Canada (TSX:AC) is a great stock to own, as market fear turns into hope amid falling recession fears.

Read more »

Pixelated acronym REIT made from cubes, mosaic pattern

Beginner Investors: Get Passive Income by Investing in REITs!

You can get passive income by investing in REITs like Northwest Healthcare Properties REIT (TSX:NWH.UN).

Read more »