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.
In this series, I do the initial legwork for you. To prevent us from being inundated with scores of disparate companies, I conduct my search by industry. This allows us to make some initial comparisons among semi-related companies.
Today, let's look at the building products space. Below are the six building products stocks that are closest to their 52-week lows and have market caps above $200 million.
|
Company |
Recent Price |
52-Week Low |
52-Week High |
P/E Ratio (Trailing) |
|---|---|---|---|---|
|
Universal Forest Products |
$26.30 | $22.91 | $39.84 | 82.2 |
|
AO Smith |
$35.32 | $29.81 | $45.80 | 16.4 |
|
Armstrong World Industries |
$38.76 | $32.47 | $54.58 | 27.8 |
|
Lennox International |
$30.91 | $24.37 | $54.10 | 16.8 |
|
Ameresco |
$10.97 | $8.60 | $17.46 | 14.8 |
|
Apogee Enterprises |
$10.00 | $7.79 | $14.82 | NM |
Sources: S&P Capital IQ, Yahoo! Finance.
None of the P/E ratios are especially cheap -- AO Smith, Lennox, and Ameresco have the lowest ratios, and they're only at moderate levels.
That said, digging deeper, the P/E ratios can be misleading, both on the good side and the bad. For example, Universal Forest Products has a whopping 82.2 figure, but it made four times as much in earnings in 2009 as it has in its trailing 12 months. Meanwhile, two-thirds of AO Smith's earnings were derived from discontinued operations.
As you continue your research, you'll also want to consider the effect the economy has had on past numbers and the role it will play in the future. If you are interested in continuing your research on a stock mentioned here, add it to My Watchlist to stay abreast of all of our Foolish analysis.
