Hello again, Fools. I’m back to call attention to three stocks trading at new 52-week lows. Why? Because the big gains in the stock market are made by buying attractive companies
- during times of extreme investor pessimism; and
- when they’re available at a clear discount to intrinsic value.
If you want to turn an average $27K TFSA into a six-figure hoard in five years, you’ll need an annual return of at least 30% to do it. So, while contrarian stocks tend to be on the volatile side, the upside return potential is often well worth the risk.
Let’s get to it.
Teck decked
Leading off our list is copper miner Teck Resources (TSX: TECK.B)(NYSE: TECK), which is down 32% over the past year and currently trades at 52-week lows of $16.80 per share.
The stock has fallen sharply since April, as copper prices have been hit hard by ongoing trade tensions. But Teck might now be too cheap to pass up. Currently, the shares trade at a cheapish forward P/E of 5.9.
And while Teck’s recent Q2 results missed expectations, management remains committed to returning cash to shareholders through hefty dividends and buybacks.
“[W]e updated our capital allocation framework to reflect our focus on returning additional cash to shareholders and we are accelerating our innovation-driven efficiency program RACE21 and aim to generate annualized EBITDA improvements,” said CEO Don Lindsay.
Teck is down 25% year to date.
Stan and deliver
Next up, we have engineering firm Stantec (TSX: STN)(NYSE: STN), whose shares are down 16% over the past year and currently trading near 52-week lows of $26.70 per share.
Concerns over a slowing economy and decreased infrastructure spending have weighed on the stock, but Stantec’s fundamentals remain rock solid. In the company’s Q2 results last week, EPS of $0.50 topped estimates by $0.05, as revenue improved 10.5% to $953.6 million.
“We are focused on building the engine of the organization that will convert our record-high backlog into revenue while continuing to grow our business,” said CEO Gord Johnston. “This organizational reshaping is a necessary step in becoming a more nimble organization and positions us to drive stronger returns for our investors.”
Stantec is down 8% over the past three months.
Down by the bay
Rounding out our list is copper miner Hudbay Minerals (TSX: HBM)(NYSE: HBM), which is down 33% over the past year and trading near 52-week lows of $4.40 per share.
Just like Teck Resources, Hudbay shares have been pressured heavily in recent months by weak copper prices. In the most recent quarter, Hudbay’s EPS of -$0.21 missed estimates by $0.23, while revenue sank 11% to $329.4 million.
With that said, Hudbay delivered record mine production at its key Lalor mine, putting itself on track to meet its goals for the year. Moreover, operating cash flow clocked in $107 million.
“Based on these results, we are on track to achieve our full year 2019 production and cost guidance,” said Interim President and CEO Peter Kukielski.
Hudbay shares are down 39% over just the past three months.
The bottom line
There you have it, Fools: three ice-cold stocks hitting new 52-week lows.
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.
Fool on.
