When good, quality stocks fall in value, it could be an opportune time for investors to buy low, securing a good price for them. However, you don't want to be buying any stock simply because it has declined in value. By focusing on good investments that have dipped in price and that are good bets to increase over the long run, it could be a great opportunity to buy low today, and sell much higher later on.
Below are three quality stocks trading near their 52-week lows you might want to keep a close eye on as they could be overdue to rally.
1. Sunstone Hotel Investors
Sunstone Hotel Investors (SHO 0.29%) has struggled over the past year, falling 15% in 12 months. The REIT's troubles began late last year, when the market suffered as a whole. And while Sunstone did begin to recover in 2019, its quarterly results have been inconsistent. In just the past four quarters, profits have been as low as $13 million and as high as $85.6 million.
Sunstone's focus is on hotels, so concerns about tougher economic times ahead and a corresponding decrease in demand might be weighing down Sunstone's share price. However, with many big-name brands like Hilton and Hyatt in its portfolio, investors don't have much to worry about. Over the years, Sunstone has produced fairly strong, consistent results with revenues ranging between $1.15 billion to $1.25 billion over the past four years. The company has also had no problem posting a profit during those years as well. There haven't been any big red flags surrounding the company that would suggest that this drop-off is warranted, and that's why it could be a good candidate to recover from this decline.
Sunstone is currently trading within about 9% of its 52-week low.
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2. Gilead Sciences
Gilead Sciences (GILD 0.47%) has struggled much like Sunstone has, failing to gain much traction this year and rising just 5% since January. What's surprising is that the biotech company is coming off a very strong Q2 in which it beat expectations while also raising its sales guidance for the remainder of 2019.
Gilead achieved lots of growth in its HIV medicines, and it still has a lot of potential to not only develop more products but expand into other parts of the world. In its most recent quarter, the bulk of the company's sales have come from the U.S. market (73%), with Europe accounting for about 18% and the remainder coming from other international markets.
Despite the positive results, investors have not shown a lot of excitement for the stock. While the stock hasn't been a big decline this year, it simply hasn't been able to gain any momentum. Its decline in price began back in October of 2018 when quarterly results were not all that impressive and there were questions about the company's leadership. The struggles in the market late last year only made matters worse for the stock.
Although things have improved and the company is producing some good results, the stock still hasn't rallied, and that's why it could be overdue for an upswing in its stock price. Currently, it's trading at just 14 times earnings and it's within 10% of its 52-week low.
3. Fortive
Fortive Corporation (FTV 0.23%) has taken investors on a bit of a roller-coaster ride this year. The industrial conglomerate has a lot of businesses under its belt, focusing on two major segments-professional instrumentation and industrial technologies. Automation, transportation, and franchise distribution are just some of the areas that the company is involved in. This diversification makes Fortive a strong and stable stock, giving it many possible ways to grow. When the stock came close to the $90 mark in April, 2019 was starting to look like a strong year for the company. Since then, however, Fortive has fallen short of sales expectations for Q1, and in Q2, management downgraded its outlook for the year.
Despite these setbacks, Fortive still has a lot of growth potential, especially in the infection-control market. There, the compounded annual growth rate is expected to be 6.5% until the end of 2022, when the market size is expected to reach more than $21 billion. And Fortive's recent acquisition of Advanced Sterilization Products puts the company in a good position to take advantage of that opportunity.
Currently, Fortive is trading within 7% of its 52-week low.
Takeaway for investors
All of the stocks listed here could be good long-term buys, especially given how low relatively cheap they are today. The one that stands out, however, is Gilead just for the sheer amount of growth potential that the company has, especially focusing on HIV medicines and the significant potential it still has in markets outside of the U.S. And with the stock stuck in a range for much of this year, it could just take a good earnings result or one big breakthrough to send its share price soaring.
