"Buy low, sell high" is a mantra often repeated when referring to success in the stock market. That is easier said than done, however. Proper timing, discipline, and research are all necessities while trying to "catch a falling knife."
When buying beaten down shares of a company, you have to be aware of the risk associated with the trade. The stock is falling for a reason, and it is just as likely to continue to decline as it is to bounce back. That's where the timing and discipline comes in. If you decide to step in and buy, make sure to not overextend yourself too early by purchasing the whole lot at once. Purchasing shares in predetermined increments so that you don't get wiped out in a single downward move, and using possible price declines as opportunities to lower your cost basis is a wise tactic.
But you can't average-in to a trade forever. The key to any good trade is to establish a distinct exit point beforehand that screams, "You are wrong!" and signals you to get out. The biggest problem losing traders have is holding on when they know they should be getting out. Hope and fear are not winning strategies in the stock market.
With all that said, here are five companies whose shares are near 52-week lows and have potential for significant moves to the upside:
1) A123 Systems
2) Entergy Corporation
3) SinoCoking & Coke Chemicals
5) Central European Distribution