Hello there, Fools. I’m back to call attention to three stocks trading at new 52-week lows. Why? Because the biggest stock market gains are made by buying attractive companies
- during times of severe market anxiety; and
- when they’re available at a clear discount to intrinsic value.
As legendary value investor Warren Buffett once quipped, “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” And there’s no better place to buy bargain stocks than in a TFSA account, where all of the upside is tax free.
Let’s get to it.
Leading off our list is oil and gas company Husky Energy (TSX:HSE), whose shares are down 43% over the past year and trading near their 52-week lows of $12.04.
Weak oil prices and output curtailments continue to weigh heavily on the stock, but it might be a good opportunity for long-term dividend investors.
Two months ago, management said it expects 2019-23 free cash flow of $8.7 billion and capital spending of $1.7 billion versus its prior view of $4.8 billion and $3.15 billion, respectively.
“The company’s strong balance sheet remains a competitive advantage and with little need to allocate any free cash flow toward debt repayment, we can prioritize shareholder returns through growing a sustainable cash dividend,” said CEO Rob Peabody.
Husky shares are off 16% in 2019 and offer a healthy yield of 4.2%.
5 Canadian Growth Stocks Under $5Get Your Free Report Today
Next up, we have pipeline operator Kinder Morgan Canada (TSX:KML), which is down 29% over the past year and trading near its 52-week lows of $11.11 per share.
The shares plunged in May over management’s decision to remain a standalone company, and they have yet to recover. Long-term investors might want to take a look, though.
In the most recent quarter, Kinder generated EBITDA of $1.95 billion and discounted cash flow of $1.37 billion. That bodes well for continued dividend growth and share repurchases over the next few years.
“KML continues to be a valuable entity with assets that are underpinned by multi-year take-or-pay contracts with high-quality customers and stable cash flows,” said Chairman and CEO Steve Kean.
Kinder is down 29% in 2019 and currently offers a yield of 5.7%.
Mullen it over
Rounding out our list is oilfield services specialist Mullen Group (TSX:MTL), whose shares are down 40% over the past year and currently trade near 52-week lows of $9.20 per share.
Weak oil and prices and depressed drilling activity have hurt the stock, providing investors with a possible buying opportunity. In Q1, streamlining efforts helped revenue improve 9.4% to $319.6 million and net income grow to $11.6 million, despite lower activity.
“These efforts helped our bottom line which I am most pleased with given the dramatic declines in drilling activity in western Canada and the increasingly competitive marketplace,” said Chairman and CEO Murray Mullen.
Mullen shares are down 23% in 2019 and offer a particularly juicy yield of 6.4%.
The bottom line
There you have it, Fools: three ice-cold stocks hitting new 52-week lows worth checking out.
As always, don’t see them as formal recommendations. Instead, view them as a starting point for more research. Trying to catch a falling knife can be hazardous to your wealth, so plenty of homework is still required.
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 Brian Pacampara owns no position in any of the companies mentioned. Mullen is a recommendation of Stock Advisor Canada.