With the recent market sell-off, many stocks are looking a lot cheaper these days. Big blue chip stocks like Caterpillar (CAT) and Boeing (BA) are definitely on our watch list as they head towards a 52-week low. Still, most stocks are still trading significantly higher than their 2009 trough levels and we expect that many of them will become much cheaper in the weeks ahead.
Of course, the market is not a perfect pricing mechanism and it seems that investors have been overly anxious is selling some stocks. Here are 6 stocks that are trading near their 52-week lows. In fact, all of these stocks trade below $5 per share and it would almost appear as if the market sees bankruptcy in their near future. However, a look at their fundamentals shows a different story altogether. These stocks may be in the hospital, but they are certainly not in the ICU.
Office Depot (ODP)
The office products retailer hit a new 52-week low on Friday and now trades at barely over $2 per share. That gives the company a market cap of only $620 million. That’s darn cheap for a company that will generate over $11.5 BILLION in revenues this year. The stock is experiencing flat growth (read zero growth) right now, but has not experienced any significant sales declines yet. Again with future EPS of only $.16, this stock is not a slam dunk, but it’s hardly a penny stock either.
JetBlue Airways (JBLU)
Airline stocks are always a difficult lot to evaluate. However, it’s pretty clear that you want to stick with the ones that make money. That certainly narrows the field, but JetBlue is one of those rare, profitable airlines. Yet, a second quarter earnings miss sent JBLU shares below $4 per share. That gives JBLU a larger market cap than unprofitable AMR, but appears to underestimate their double-digit revenue growth.
Many investors may not be familiar with Move, but they probably familiar with Realtor.com. The company operates a network of real estate websites, highlighted by Realtor.com and Move.com. While real estate has not been great sector the last few years, Move is expected to be profitable this year on nearly $200 million in revenue. They also hold over $90 million in cash and zero debt on their balance sheet.
Tenet Healthcare (THC)
Tenet is one of the nation’s largest hospital systems and will garner nearly $10 billion in revenue this year. Last quarter alone, Tenet generated $178 million in operating cash flow. The hospital chain is posting positive growth and is profitable, and yet the stock trades under $5 per share.
Talbot’s stock price has plunged 70% since the beginning of 2011. At a glance, you would almost think this retailer is going out of business. The company is trying to execute an image refresh and have already indicated that 2011 will be a transition year. That could push TLB to a loss this year as promotional costs and restructuring costs eat away at profits. However, this $2 stock traded in the teen’s was recently as last year. If the company is successful in executing its turnaround strategy, investors will see a 10x return.
United Online (UNTD)
Last, but not least, we come to United Online. Despite falling below $5 last week, this stock trades at a forward P/E of only 6x and offers a current dividend yield of nearly 8%. In the last year, UNTD has generated $118 million in operating cash flow which is more than enough to cover their $35 million dividend payments each year. This is another stock that hardly offers great growth prospects, but the dividend yield and valuation are difficult to ignore.