15 Shares Hitting 52-Week Lows

Published in Investing on 17 May 2012

Eurozone panic creates rich pickings for investors.

I love a stock-market panic.

Crashing confidence in the eurozone is providing the bargain opportunities blue-chip investors often have to wait years for.

I trawled the market looking for the shares that are trading near their lowest price for a year. Below is a list of 15 FTSE 100 and mid-cap stocks from a broad range of sectors that are currently on sale at depressed prices. 

I've removed a large number of mining companies from my trawl results as so many are at historically low prices, a number of which fellow Fool Cliff D'Arcy recently looked at.

Here is my pick of 15 stocks trading at low prices today.

NameMarket cap (£m)Share price (p)52-week low (p)% off 52-week lowP/EYield (%)
Royal Dutch Shell (LSE: RDSB)131,1942007.519423.4%7.205.1
Anglo American (LSE: AAL)28,545204420400.2%7.012.2
WM Morrison Supermarkets (LSE: MRW)6,9512722720.0%10.63.9
Kazakhmys (LSE: KAZ)3,8817097070.3%4.402.4
RSA Insurance (LSE: RSA)3,59110099.50.5%7.289.0
Investec (LSE: INVP)3,1003263211.6%8.175.2
Man Group (LSE: EMG)1,51881801.3%20.512.6
National Express (LSE: NEX)1,0632002000.0%12.14.7
Cable & Wireless Communications (LSE: CWC)779.430.130.10.0%12.916.3
JD Wetherspoon (LSE: JDW)473.23773711.6%9.213.2
Synergy Health (LSE: SYR)450803793.51.2%17.32.0
Guinness Peat (LSE: GPG)383.223230.0%20.95.2
Interserve (LSE: IRV)3542772702.6%8.786.9
Shanks (LSE: SKS)341.884840.0%20.73.8
Workspace (LSE: WKP)309.22232134.7%8.33.6

It is important when researching shares to determine whether a company's earnings and dividend are sustainable. Larger companies are often the dominant, established participants in their industries. While that provides some help, it doesn't make the shares immune from management shortcomings (such as a disastrous acquisition) or industry decline.

From the list above, I've picked three shares that I think stand out.

1) Royal Dutch Shell

How brave do you have to be to buy Shell? At today's price, you don't need to be brave at all.

Shell is a king of the dividend payers -- the titan oil company has not cut its dividend to shareholders since the end of WW2. In fact, in 2011, dividends from Shell alone accounted for nearly 10% of all dividends paid out by UK-listed companies.

Concerns about economic growth in the eurozone have recently hit the oil price. Today, Shell shares are cheap, having rarely traded for any less during the last 18 months.

An investor buying Shell today gets a dividend yield over 5% that is forecast to continue rising during the next two years.

The quality of Shell's earnings demonstrates the company's bargain credentials. Despite the near economic depression the world has recently suffered, Shell delivered an average 225p of annual profit per share between 2008 and 2011. How profitable will Shell be going forward? Considering Shell's profits held up well during the banking crisis, I am confident of the company's long-term future regardless of developments in the eurozone.

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2) JD Wetherspoon

JD Wetherspoon is the company behind some of the biggest pubs in the UK. In a Wetherspoon's, you can still find a decent pint on sale for under £2 and a traditional breakfast for just £2.99.

Despite the doom and gloom around the pub industry, JD Wetherspoon has enjoyed reasonable growth in the last five years. Sales for 2011 were 25% higher than in 2006. Earnings per share (eps) reached 40.3p versus just 24p five years previously.

The current price suggests the market may be worrying about debt levels at the company. JD Wetherspoon has debts almost equal to its entire market capitalisation. In 2009, the dividend was sacrificed to pay down borrowings when they stood at a similar level to today's.

Fortunately for the bargain-hunters, the market is not demanding a champagne-like mark-up for JD Wetherspoon shares. The company trades at 9.9 times forecast earnings for 2012, falling to just 9.2 times the consensus 2013 forecast. The dividend was restored for 2010 and is expected to rise modestly in the next couple of years, giving a reasonable yield.

The debt worries me, however, and I expect the current market falls offer better value elsewhere, such as JD's rival chain Greene King (LSE: GNK), which currently trades on both a higher yield and lower earnings multiple.

3) WM Morrison Supermarkets

Recent troubles at Tesco (LSE: TSCO) have drawn investors' attention away from the value elsewhere in the UK supermarket sector.

If you like to shop around for bargains, Morrison's shares are currently trading close to their lowest since January 2011. Better still, the supermarket chain is trading at its lowest rating in the last five years: just 9.85 times 2013 earnings and is expected to yield 4.4% in dividends.

Of the supermarkets available, Morrison has the best growth prospects. Consensus forecasts suggest eps will grow at an average rate of 8.1% for the next two years. The dividend is expected to rise, on average, 11.4% per year in that time.

Morrison's looks to be a low priced growth share that investors may have overlooked. While its most recent dividend payout of 3.9% is much less than the 5.1% on offer from J Sainsbury (LSE: SBRY) and it's historic P/E of 11.1 is well ahead of Tesco's cut-price rating of 9.5, today's price might represent the best opportunity to pick up shares in the company since the problematic Safeway takeover of 2004.

Finally, let me finish by adding that more share ideas can be found within this Motley Fool report: "8 Shares Held By Britain's Super Investor". The guide reviews the investing approach and portfolio of City dividend legend Neil Woodford and is free to download today.

Further investment opportunities:

> David does not own shares in any of the companies above.

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Comments

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kiffberet 17 May 2012 , 12:05pm

Just dripped a bit into RSA, and if the panic continues I'll plough some more in. Shell is also at the top of my watch list, but I can't make my mind up if I should go for BP instead.... Or wait done more.
Tough times for decisions.

forrado 17 May 2012 , 12:07pm

Indeed, it's starting to get "interesting". Having kept a sizeable chunk of my powder dry I’ve started firing off a few rounds. Not that I’ll be going in with all guns blazing, more like I’ll be picking off my list of targets using an averaging down course of action.

kiffberet 17 May 2012 , 2:37pm

Why no mention of Aviva with its 10% yield, falling profits in europe due to banking crisis/recession and leaderless status...?

JustWannaBuy 17 May 2012 , 2:43pm

Topped up on RDSA and BLT. Long term I believe these are good investments. I had the same dilema re BP but decided on Shell.

OxonianCambion 17 May 2012 , 2:49pm

Wouldn't RDSB be more appropriate for buying Shell for people in the uk?

kiffberet 17 May 2012 , 3:05pm

There's probably more value to realise in BP than in Shell, but on the diwn side, BP seem to make a lot more mistakes...

apprenticeDRL 17 May 2012 , 3:50pm

I hold both RSA and Aviva, but personally I think RSA have the better value at the moment

ANuvver 17 May 2012 , 4:09pm

OxCamb:
Agreed - AFAIK the B class Shell shares are specifically designed for and best appropriate to UK investors.

kiffberet:
Big oil is a hazardous business. They all slip up from time to time. It's just been BP's turn in the stocks recently.

I suspect no reference to AV because some are seriously beginning to doubt whether the value will ever out. There's even mild speculation that it's in takeover territory. As far as I can see its PIIGS exposure isn't so bad, but the share price is still bound to act as a sort of Eurobarometer all the same. Also many would regard a forecast yield of 10% as into "red zone and klaxons" territory.

AV is my worst performer by far. I'm holding (through increasingly gritted teeth) but I wouldn't be brave enough to buy.

Since we're down the euro-brick road here, I wonder whether a Greek exit would actually strengthen the EZ. It is possible that a victory by the "you cannot be Syriza" party could lead to the Greek economy becoming a ghastly example "pour encourager les autres", as it were. If we can get past the "euros in binbags under the bed" panic, this may come to pass.

Sorry for going OT.

rober00 17 May 2012 , 4:56pm

Resolution and Chesnara are both worth a look at these prices.

OsbieFeel 18 May 2012 , 1:12am

RDSB has been the star of my portfolio. I was up 50% at one point. Love it.

I also like the fact that RSA keeps churning out cash, but everybody thinks it's too boring to buy! Keeps it nice and cheap for the rest of us.

Man Group has been causing me pain of late, as every time it looks like recovering the shorters pile on it again. Still, that must end some day ... and hopefully some of them will lose their shirts when it happens!

I also bought Interserve recently. They're big in Qatar, which will be gearing up for the 2022 World Cup before long.

Finally, let me confess red-facedly to owning a small stake in CWC. Just a flying hump at a rolling doughtnut, though :-)

MrContrarian 18 May 2012 , 9:37am

Shell, Wetherspoon and Morrison are sound picks at low prices. I did hold Morrison for two months after its irrational fall on Tesco's profit warning in Jan.
The other resource shares are riskier - demand for copper and other basic materials could fall much more than oil if China's construction boom reverts to a sustainable pace.
See what an extreme outlier China is in this cement consumption chart
http://www.zerohedge.com/news/one-epic-chinese-bubble-one-chart

JohnnyCyclops 18 May 2012 , 11:11am

Took the plunge on AV yesterday. Their PIIGS exposure isn't that high (from memory), but market sentiment is dragging it down. Currently reading Howard Marks' "The Most Important Thing" so perhaps that's colouring a strong contraian streak of buy when the crowd is selling. An average share bought cheaply is just as good as a strong share bought at fair value.

shinygoldcar 18 May 2012 , 11:55am

Undoubtedly Morrisons is cheap, but bear in mind it is ex-div. So add 7.5p to the share price and you get its real share price, but treat the 7.5p discount as an early dividend!

RegDiversify 18 May 2012 , 1:02pm

Whenever I fly out of Heathrow or Gatwick I always seem to find myself having breakfast at a Wetherspoons pub but at twice the price of my local one. However, the breakfast and shares still look like good value.

SevenPillars 18 May 2012 , 1:33pm

I imagine there will be a technical bounce in the next few weeks, just in time for the Greek election results in June to come back inconclusive as they surely will and for the market to probably tank again on the back of that and a messy end to Greece participation in the Euro and default. These could all be a lot cheaper, even if undeserved, by then as Mr Market goes into paranoid panic mode again.

DashingDave123 18 May 2012 , 4:01pm

Most of my shares have been stopped out by stop/losses as the market has fallen and I decided to call it a day on the few left this morning. I am now 0% shares and 100% cash. I certainly had none of the 15 above which have been falling for months and I would not recommend any of them. Statistically the shares that have done worst over the last 6 months will continue to be the worst performers over the next 3 months. It's called momentum, and it works most of the time. Don't forget that saying about trying to catch a falling knife!

As for that other saying about buying when others sell and there is blood in the streets, I suspect we haven't seen anything yet. The problems of Greece, Spain, Italy, Portugal and Ireland and even Holland and of the Euro itself are basically insoluble. The real collapses haven't happened yet and will cost trillions when they do. Even China has financial problems. It's going to be the 30s all over again is my guess. Today's bad news was all Spain's banks being downgraded. Good luck if you hold shares. You should have gone for Sell in May and go away. See you in November!

Arborbridge 18 May 2012 , 5:22pm

Am I the only one suffering mood swings. It's like a shop full of sweets: so much to choose from. Then I think of the difficulties ahead and the possibility of a more severe banking crisis and wonder if worse is to come.
" As for that other saying about buying when others sell and there is blood in the streets," - yes, as always, the difficulty is to know when that point has been reached! I personally think the market has some way down to go yet, but the danger is that it can reverse so quickly. Even worse, of course, it can reverse and dive back again.
If you buy, do so for the dividends and hang on. No point in holding for "a couple of months".

Arb.

compound200 18 May 2012 , 5:51pm

having watched pestons bbc report euro-zone

it wasnt greece i was bothered about but SPAIN

seriously in debt--very high youth unemployment--economy tanking

snoekie 18 May 2012 , 6:43pm

I, like kiffberet have bought some more RSA, and a couple of days ago added another 10,000 Lonrho, which I still fancy to go places in the next year or so.

That leaves me tapped out for the moment, for investment. With a bit of luck the turmoil will still be continuing at the end of June when I get a bit more.

Selling is a big risk, and I need the income from the more solid stocks which will undoubtedly drop, but still yield a lot more than the money in a bank, or even under a mattress, never mind the associated CGT headache.

fedupwithbanks 21 May 2012 , 11:59am

DashingDave. What use is cash to you when eventually the Germans will be forced into printing Euros. When the whole job tanks, you will need assets not toilet paper.

YeeWo 21 May 2012 , 4:38pm

What "nasty" is on RSA's books for it be so cheap?

Unilever and Standard Chartered are all near 52 week low points also and are nicely diversified away from the European Union!

jongleur100 23 May 2012 , 3:29pm

Re Shell: NB The share price given in the table is actually for RDSA (opened at 2006p on 17th May) not for RDSB (opened 2076p on 17/05).
RDSB fell 2.6% to 2022 the following day.
It's at 2052 at the moment - I can visualise it getting even cheaper in a Grexit scenario.

jongleur100 23 May 2012 , 3:30pm

PS When I say 'cheaper', I mean 1950p or lower. But this is all imo.

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