Back in 2009, the markets saw one of the largest declines and also one of the greatest buying opportunities in history. The global economy and the stock markets appeared to be in a complete free-fall. At that time, major banks and other companies were collapsing from one week to the next. It was an extremely hard time for investors most of whom had racked up huge losses. There was almost no visibility as to when it would end and what the economy would look like in the aftermath. Fast forward a couple of years and we have another crisis emanating from Europe, plus strong chances for a second recession. These concerns have brought the markets down and some stocks (for various reasons) are now offering investors a second chance to buy shares at prices that are close to, or even below the lows hit at the height of the 2009 financial crisis. Many investors later wished they had bought stocks at the 2009 lows because the shares of many companies rebounded sharply within months. With prices this low, it makes sense to consider these stocks now:
Hewlett Packard (NYSE:HPQ) shares are trading at $23.19. HPQ is a leading technology company with products ranging from computers to printers. The RSI for HPQ is about 40, so these shares are around oversold levels. The 50-day moving average is $28.09 and the 200-day moving average is $37.49. Earnings estimates for HPQ are at $4.84 per share in 2011, and $4.78 for 2012. This gives HPQ a super low PE ratio of only about 5. HPQ pays a dividend of 48 cents per share, which is a yield of 2.1%. With a PE ratio of 5, chances are these shares have hit rock bottom and are a solid long-term buy. On May 2, 2009, HPQ shares reached a low of about $26.98. Today you can buy the stock for about 10% less.
Weatherford International (NYSE:WFT) is trading around $12.70. Weatherford is a leading provider of equipment and services to the oil and gas industry, based in Switzerland. The RSI for WFT is about 29, so this stock is at very oversold levels. These shares have traded in a range between $12.62 to $26.25 in the last 52 weeks. The 50-day moving average is $17.07 and the 200-day moving average is $20.07. WFT is estimated to earn about 88 cents per share in 2011 and $1.65 for 2012. On February 16, 2009, WFT shares traded around $10. Today, you can buy WFT for just a little more than that even though oil has just about doubled in price off the financial crisis lows.
United States Steel Corp (NYSE:X) shares are trading at $22.47. United States Steel is a leading maker of steel products. The RSI for X is about 32, so these shares are at very oversold levels. These shares have traded in a range between $21.73 to $64.03 in the past 52 weeks. The 50-day moving average is $30.79 and the 200-day moving average is $46.32. X is estimated to earn about $1.45 per share in 2011 and $4.18 in 2012. X pays a dividend of 20 cents per share which is equivalent to a .9% yield. The PE ratio and other valuation metrics indicate these shares are cheap. I think it makes sense to start buying now, and more later on any further weakness. On March 2, 2009, X shares hit a low of $17.69 and recently the stock was trading very close to that level even though world markets are not in free-fall as they were back then.
Central European Distribution Corp. (NASDAQ:CEDC) shares are trading at $6.59. CEDC is a leading beverage distribution company, based in Pennsylvania. The 50-day moving average is $7.15 and the 200-day moving average is $13.57. Earnings estimates for CEDC are 61 cents per share in 2011 and 81 cents for 2012. The 52-week range is $5.21 to $28.08. Book value is stated at $23.83. On Friday, CEDC surged up 58 cents to close at $7.10. This stock was trading at $6.47 on March 2, 2009, and today it is trading for about the same price.
ENI SPA (NYSE:E) is trading around $34.86. ENI is a major integrated oil and gas company, based in Italy. These shares have traded in a range of $33.93 to $53.80 in the last 52 weeks. The 50-day moving average is $37.64 and the 200-day moving average is $43.49. E is estimated to earn about $5.19 per share in 2011 and $5.58 for 2012. ENI is one of the least known, and least expensive of all the major integrated oil companies. The PE ratio is only around 8 times earnings and E pays a strong dividend of about $2 per share, which is equivalent to a yield of about 6%. E shares have been hit lately with the concerns over European debt problems and falling oil. This stock was trading for about $31.07 on March 2, 2009, and today can be bought for just a couple dollars more.
Total SA (NYSE:TOT) shares are trading around $43.67 per share. Based in France, Total is a major integrated oil company with operations worldwide. These shares have traded in a range between $40 to $64.44 over the past 52 weeks. The 50-day moving average is $47.45 and the 200-day moving average is $54.45. TOT earnings estimates are about $7.51 per share in 2011, and $7.53 in 2012. The dividend yield on TOT is about 7%. These shares are undervalued especially when compared with valuations of other major integrated oil names. Due to the debt crisis in Europe, Total stock has dropped recently along with oil prices and this looks like a good time to be buying. On March 2, 2009, Total shares traded for $45.73 and today you can buy the stock for less even though the price of oil is much higher than it was back then.
Research In Motion (RIMM) shares are trading at $21.90. The 50-day moving average is about $26.50 and the 200-day moving average is about $45.46. Earnings estimates are about $4.80 for 2011, and $4.87 for 2012. This gives RIMM shares a PE ratio of only about 5 times earnings. RIMM has a strong balance sheet. On March 2, 2009, RIMM shares traded for about $36.34 and today sell for considerably less than that. Obviously, competitive pressures have built up against RIMM in the past couple of years but the company has a very valuable portfolio of patents and the stock may have some rebound potential at these low levels.
The data is sourced from Yahoo Finance and Stockcharts.com. The information and data are believed to be accurate, but no guarantees or representations are made.
Disclaimer: Rougemont is not a registered investment advisor and does not provide specific investment advice. This information is solely educational in nature and not intended to serve as the basis for any investment decision.