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3 Stocks That Shouldn't Be Hitting New Lows This Week

By Rick Munarriz – Feb 10, 2016 at 1:34PM

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Groupon, Sirius XM, and Habit hit new 52-week lows, but they don't deserve the market rejection.

Source: Sirius XM.

A lot of stocks have been getting pounded these days, but some names are taking bigger hits than others. Let's take a look at three stocks that have hit fresh 52-week lows this week, even though their fundamentals are holding up better than their stock charts would seem to suggest. 

Sirius XM Radio (SIRI -1.21%)
The only provider of satellite radio has cornered the market on premium radio through factory-installed receivers, but swaying Wall Street has been another story. Shares of Sirius XM hit an intraday low of $3.29 on Monday, the lowest level for the stock since late 2014. 

Fears of the connected car dooming Sirius XM, as folks stream content off their smartphones, are overblown. Sirius XM's user base continues to grow. It began the year with 29.6 million subscribers, 2.4 million more than it had a year earlier. It has been able to parlay its growing audience into scoring lucrative content deals, and the company that, at one point seemed on the brink of bankruptcy in 2009, has been profitable for 20 consecutive quarters, according to S&P Global Market Intelligence data.

Groupon (GRPN -8.92%)
The undisputed champ of flash sales and daily deals has been in Mr. Market's doghouse for a long time. Unlike Sirius XM -- which hit an eight-year high just three months ago -- Groupon's been falling backwards ever since the hype of its 2011 IPO washed away. Groupon shares hit a new all-time low of $2.15 on Tuesday.

Groupon investors can't seem to catch a break. The stock shed a third of its value in 2014, only to take a brutal 63% haircut in 2015. It's obviously not finding a lot of success in 2016. 

The former dot-com darling has suffered through leadership changes, layoffs, and international mistakes. However, its stateside business continues to grow. If the recent market volatility is an indicator that we're about to go into an economic funk, Groupon is well suited for lean economic times. It provides consumers with cheap local experiences, while also providing merchants with a lead-generating platform with no upfront costs. Groupon's model is made for dark times. 

The Habit Restaurants (HABT) 
Fast-growing fast-casual chains have fallen out of fashion, and recent debutante Habit is getting caught up in the wave of apathy. The burger flipper hit $18.10 earlier today, the lowest that the stock has been since underwriters priced its 2014 IPO at $18. It has never traded this low publicly.

At a time when the former poster child for fast casual is suffering from major defections, Habit has been consistent. The 3.3% uptick in comps during the fourth quarter means that Habit has come through with 48 consecutive quarters of positive comps. That's 12 years, folks.

There are now more than 140 locations, with plans to open at least 30 this year. Heady expansion, and a healthy streak of positive comps, should keep growth cooking in the double digits for a long time. The stock market may not be hungry for the chain that Consumer Reports readers gave top honors in a burger taste survey two years ago, but money always inevitably follows consumers. 

Sirius XM, Groupon, and Habit are growing their audiences, and one way or another, the stocks will eventually follow suit.

Rick Munarriz owns shares of Habit Restaurants. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Sirius XM Holdings Inc. Stock Quote
Sirius XM Holdings Inc.
$5.71 (-1.21%) $0.07
Groupon, Inc. Stock Quote
Groupon, Inc.
$7.96 (-8.92%) $0.78
The Habit Restaurants, Inc. Stock Quote
The Habit Restaurants, Inc.

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