Investors usually want to buy low and sell high. So the initial prices investors pay for their new positions are very important. Analyzing stocks that are near their 52 week lows is a good strategy to find cheap stocks. Additionally, stocks trading at attractive multiples are also very likely to beat the market in the future as they are undervalued and has great potential to grow. In this article, we are going to focus on the large cap stocks that are trading within 10% of their 52-week lows. All companies have at least $10 billion market cap and P/E ratios of lower than 15. The market data is obtained from Finviz.
Percent Above 52-Week Low
Barrick Gold Corporation
China Telecom Corp. Ltd.
Chesapeake Energy Corporation
CME Group Inc.
Campbell Soup Co.
Kinross Gold Corporation
Perusahaan Perseroan PT Telekomunikasi Indonesia Tbk.
CME Group Inc is the worst performing US stock among the stocks listed above. It lost 21.41% over the past 52 weeks and it is now 6.43% above its 52-week low. CME Group provides a wide range of investment products and also offers clearing services for cleared over-the-counter derivatives. The company reported net income of $316 million for the third quarter of 2011, up from $244 million for the same quarter of 2010. CME has a market cap of $16B and a P/E ratio of 12.64. As of September 30, 2011, there are 32 hedge funds with CME positions. For example, Ken Griffin's Citadel Investment Group had $132 million invested in CME shares.
Exelon Corporation is the closest to its 52-week low among the US stocks. It is only 4.77% above its 52-week low and it lost 3.14% over the past 52 weeks. Exelon is a utility services holding company. For the third quarter of 2011, Exelon reported net income of $601 million, compared with $845 million for the same period a year earlier. EXC has a market cap of $26B and a P/E ratio of 10.97. There are 23 hedge funds disclosed owning EXC stocks in their 13F portfolios at the end of the third quarter last year. For instance, Jim Simons' Renaissance Technologies initiated a brand new $64 million of EXC over the third quarter. Steven Cohen's SAC Capital Advisors also had $51 million invested in EXC at the end of September.
Chesapeake Energy Corporation also suffered big loss over the past year. It was down 18.86% during the past 52 weeks and is now within 8.13% of its 52-week low. Chesapeake produces natural gas and oil and natural gas liquids. The company reported third-quarter net income of $922 million in 2011, up from $558 million for the same quarter a year ago. CHK has a market cap of $15B and a P/E ratio of 11.98. As of September 30, 2011, twenty-seven hedge funds disclosed to own CHK in their 13F portfolios. For example, T Boone Pickens' BP Capital invested $15 million, 12.6% of its total portfolio value, in CHK at the end of September. David Dreman, Israel Englander, John W. Rogers, and Andrew Hall are also bullish about CHK.
Timing is very important for those who want to make money by buying low and selling high. The stock market is taking off right now. The S&P 500 index was up more than 17% since the end of the third quarter. We think the economy will continue to grow and those stocks that suffered big losses during the past year are also very likely to rebound. We encourage investors to do some in-depth research on the low P/E stocks that are close to their 52-week lows for their own portfolios.
Disclosure: I am long CHK.