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

Cott Corp, Pulse Seismic, and Le Chateau have hit 52-week lows. Could this be the perfect time to invest?

| More on:
The Motley Fool

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?

1. Cott Corp

Purveyor of private-label soft drinks Cott Corp (TSX: BCB) hit a new 52-week low on June 27, falling to $7.33. The company produces such brands as Cott, RC Cola, Vess, Red Rain Energy, and eXact sports drinks, among others in North America and the U.K.

Cott has been struggling for years as consumers are moving away from sugary soft drinks and becoming more health-conscious. Despite attempting to expand into more health-conscious products, it has not been enough to stem the losses in its core brand. It is almost impossible today to remember that the stock was trading at around $46 back in the 1990s, and at $1 in 2009.

The most recent drop was triggered by the release of the company’s Q1 report showing that revenue fell to $475 million from $505 million. This loss in revenue was followed by a net loss of $2.5 million, compared to a gain of $400,000 in Q1 2013. Analysts have adjusted their price targets for Cott to $9.44 and maintain a “sector perform” rating.

2. Pulse Seismic

Seismic data provider Pulse Seismic (TSX: PSD) triggered the Richter scale when it hit a new 52-week low of $3.06 on June 26. The company specializes in the acquisition, marketing, and licensing of 2-D and 3-D seismic data primarily to the western Canadian energy sector. The stock has been on a downward trend since peaking at $4.96 back in December 2013, and despite a small upswing in April, the stock has returned to rock bottom.

Pulse Seismic released its first-quarter results on May 1 and posted total revenue of $5.5 million, down substantially from $26 million the year prior. Net income also took a negative turn, posting a loss of $1.8 million, or $0.03 per share, compared to a gain of $2.5 million, or $0.04 per share, in Q1 2013. The losses and lack of revenue have been attributed to lower library sales during the quarter and the fact that Pulse did not have any participation surveys in progress. Free cash flow also fell during the quarter by a staggering 66%, leaving the company with $3.6 million. The average price target on the stock is $3.25, and the few analysts that follow the stock have placed a “hold” rating on it.

3. Le Chateau

Once again making our list is Le Chateau (TSX: CTU.A), with its stock hitting a new 52-week low of $1.75 on June 25. This is the stock’s fourth 52-week low in the past five weeks, spurred by continued net losses. In 2013, the company posted a total net loss of $16 million compared to a net loss of $837 million in 2012, with revenue remaining flat at $274.8 million both years.

When Le Chateau’s Q1 report came out things had not improved, with a net loss of $13 million compared to a net loss of $8.2 million in Q1 2013. Revenue fell to $53.3 million in the quarter from $56.9 million during the same period last year. Le Chateau assigned blame for its Q1 performance to poor weather and increased promotional activity in its stores. In response, the company has shed some square footage, now at 1,245,000 sq/ft, compared to 1,280,000 sq/ft at the end of Q1 2013.

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

Arrowings ascending on a chalkboard

I Think They Can: 3 Stocks That Can Keep Chugging Higher

CN Rail (TSX:CNR) and other transport plays have what it takes to chug even higher from here!

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

Better Buy: Dollarama Stock or Alimentation Couche-Tard?

Take a closer look at these two defensive retail stocks to determine which might be a better holding to protect…

Read more »

Growing plant shoots on coins
Dividend Stocks

TFSA Dividend Stocks: How You Can Earn $400 Per Month of Growing Passive Income

Here's how you can buy top Canadian dividend stocks in your TFSA to build a rapidly and consistently growing passive-income…

Read more »

top TSX stocks to buy
Dividend Stocks

GICs vs. Dividend Stocks: Where to Invest for Passive Income in 2024?

Income-seeking investors can consider holding instruments such as GICs and dividend stocks to create a recurring revenue stream.

Read more »

Dollar symbol and Canadian flag on keyboard

If You Don’t Own This Canadian Stalwart Stock, You’re Missing Some Serious Stability

Here's why Royal Bank of Canada (TSX:RY) remains a stalwart long-term investors have done well to make a core holding.

Read more »

Payday ringed on a calendar
Dividend Stocks

Got $10,000 to Invest? How to Turn it Into Monthly Income

Canadians can produce recurring monthly income streams from a $10,000 investment in two high-yield real estate stocks.

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

How to Build a Bulletproof Dividend Portfolio Starting With Just $10,000

Want to earn a growing stream of dividend income? Here's how to invest $10,000 for a great combination of income…

Read more »

Wireless technology
Tech Stocks

Got $5,000? 2 Tech Stocks to Buy and Hold for the Long Term

Here are the best tech stocks to buy, with one offering long-term growth and the other offering strong business as…

Read more »