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): Food and staples retailing is one of them.
Below are the top three companies in this space (by market cap) that are within 20% of their 52-week lows.
|
Company
|
Recent Price
|
52-week Low
|
52-week High
|
P/E Ratio (Trailing)
|
|
Wal-Mart (NYSE: WMT )
|
$56.70
|
$47.77
|
$57.90
|
14.0
|
|
Sysco (NYSE: SYY )
|
$29.19
|
$26.99
|
$31.99
|
15.0
|
|
Kroger (NYSE: KR )
|
$21.29
|
$19.08
|
$24.14
|
12.6
|
Sources: Capital IQ, a division of Standard & Poor's, and Yahoo! Finance.
The first thing you should notice is that these stocks are trading in a tight band. For instance, Wal-Mart -- though it's within 20% of its 52-week low -- is much closer to its 52-week high.
When we look at beta, a measure of stock price volatility, each is less than the market average of 1.00. Sysco is at 0.71, Wal-Mart is at 0.35, and Kroger is a mere 0.31.
This makes a lot of sense since their business models are quite stable and, on the whole, more predictable than the average company. These are the kinds of companies that can form the core of your portfolio if you buy in at a good price. I recently highlighted a similarly stable health-care stock as part of our 10 Core Stocks series. Click here to read that one.
If you are interested in reading more about these stocks, add them to My Watchlist to find all of our Foolish analysis on them.
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