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%.
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.
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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Mullen is a recommendation of Stock Advisor Canada.