If you're aiming to "buy low and sell high," then it makes infinite sense to start your search with bargain-priced stocks. Regularly reviewing a list of stocks trading near their 52-week lows can be a great first step.
Here, I'll try to do the initial legwork for you. To prevent us from being inundated with scores of disparate companies, I'll conduct my search by industry. This will allow us to make some initial comparisons among semi-related companies.
There are 24 industry groups as defined by the Global Industry Classification Standard (GICS). Consumer services is one of them. Here are seven of the larger players by market cap that are hugging 52-week lows.
|
Company |
Market Capitalization (in millions) |
% Change from 52-week Low |
P/E Ratio (trailing) |
|---|---|---|---|
|
Apollo Group |
$5,498 |
4.2% |
9.8 |
|
International Game Technology |
$4,305 |
5.8% |
24.2 |
|
H&R Block |
$3,375 |
1.7% |
8.3 |
|
WMS Industries |
$2,368 |
16.3% |
21.5 |
|
ITT Educational Services |
$1,957 |
16.5% |
5.8 |
|
Bally Technologies |
$1,874 |
15.8% |
18.6 |
|
Strayer Education |
$1,804 |
1% |
15.0 |
Source: Capital IQ, a division of Standard & Poor's. Data as of Oct. 18.
For-profit schools and gambling equipment makers dominate these plungers.
The for-profit schools have been rocked by fears of possible adverse regulation and/or the reduction of federal financial aid due to allegations of extraordinarily poor student repayment rates. You can see what plunged the market last week here. And why there may be opportunity here.
On the gambling side, it's noteworthy that the equipment makers are hitting lows as casinos like Wynn and Las Vegas Sands are near 52-week highs. One thing to remember is that the earnings multiples on these companies (both trailing and forward) are still high. Bally does have a trailing price-to-free-cash-flow ratio of 8, though.
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