In this article, we discuss the 10 best 52-week low stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best 52-Week Low Stocks to Buy Now.
What makes an average investor successful and rich in the long run is their ability to spot great stocks when they are cheap.
Everyone wants to buy Tesla, Amazon, Facebook and Google today. But those who piled into these stocks when they were cheap are rich today. That’s why we decided to share some stocks with long-term growth potential trading at around their 52-week lows.
Inflation fears, a crackdown against dual-listed companies in China, and the spread of the Delta variant of COVID-19 in the past few weeks have all impacted the stock market, sending the share prices of some stocks plunging to 52-week lows as investors dump growth and cyclical stocks in anticipation of an incoming bear market and load up on value offerings. However, for those who are smart enough to take advantage of these uncertain conditions, even some firms trading at 52-week lows can offer handsome returns in the coming months.
Some of the best stocks in this category include Erie Indemnity Company (NASDAQ: ERIE), Credicorp Ltd. (NYSE: BAP), and Proto Labs, Inc. (NYSE: PRLB), among others. These are discussed in detail below. Investors should note that a bear market only happens when the S&P 500, largely recognized as a benchmark for the whole business industry, declines in value by 20% from a previous peak. Since this hasn’t happened and federal officials have dismissed concerns about another economic crisis, most of the bear-related worries seem unfounded.
This means that many companies that have been trading at cheap prices because of concerns around lockdowns and soaring commodity prices could soon begin an ascent back towards the top. Wall Street indexes are often a good indicator of overall economic conditions. By late July, 124 firms on the S&P 500 had reported quarterly earnings and more than 88% of them beat market estimates, according to Refinitiv. On July 27, the Dow Jones Industrial Average was up 19 points, the S&P 500 was up 7 points, and the Nasdaq Composite was up 10 points.
All these indicators lend credence to the notion that present uncertainty is not going to hinder the post-pandemic economic recovery. As the recovery accelerates, the finance world is already adapting to how the pandemic transformed the way business is conducted. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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With this context in mind, here is our list of the 10 best 52-week low stocks to buy now. These were ranked keeping in mind the price of the stock, analyst ratings, business fundamentals, and hedge fund sentiment around each. It is pertinent to mention that since these stocks are at or near their 52-week lows, most of them do not have positive analyst ratings and have had their price targets reduced recently.
However, the long-term outlook on these remains positive and the pullback in price could represent a buying opportunity for shrewd investors. Hence, these are the referred to as the ‘best’ 52-week low stocks to buy now.
Best 52-Week Low Stocks to Buy Now
10. Vital Farms, Inc. (NASDAQ: VITL)
Number of Hedge Fund Holders: 9
Price as of August 1, 2021: $17.40
Vital Farms, Inc. (NASDAQ: VITL) is placed tenth on our list of 10 best 52-week low stocks to buy now. The stock has plunged in value by over 50% in the past twelve months. The company markets ethical food products and is based in Texas. It was founded in 2007. In earnings results for the first quarter, posted on May 11, the firm reported earnings per share of $0.08, beating estimates by $0.10. The revenue over the period was $58 million, up 23% year-on-year.
On May 12, investment advisory Morgan Stanley maintained an Equal Weight rating on Vital Farms, Inc. (NASDAQ: VITL) stock but lowered the price target to $23 from $38, noting that higher input costs and lower sales were weighing on the outlook for the firm.
At the end of the first quarter of 2021, 9 hedge funds in the database of Insider Monkey held stakes worth $27 million in Vital Farms, Inc. (NASDAQ: VITL), the same as in the previous quarter worth $51 million.
Erie Indemnity Company (NASDAQ: ERIE), Credicorp Ltd. (NYSE: BAP), and Proto Labs, Inc. (NYSE: PRLB) are some of the best 52-week low stocks to buy now, alongside Vital Farms, Inc. (NASDAQ: VITL).
9. Outset Medical, Inc. (NASDAQ: OM)
Number of Hedge Fund Holders: 17
Price as of August 1, 2021: $40.96
Outset Medical, Inc. (NASDAQ: OM) is placed ninth on our list of 10 best 52-week low stocks to buy now. The company’s shares have declined 27% year-to-date. The company operates as a medical technology firm and is based in California. On May 5, the firm posted earnings results for the first quarter, reporting earnings per share of -$0.56, beating market estimates by $0.24. The revenue over the period was close to $23 million, up 218% year-on-year and beating market predictions by $1.4 million.
On July 2, investment advisory Stifel maintained a Buy rating on Outset Medical, Inc. (NASDAQ: OM) stock with a price target of $62, noting that the departure of the chief financial officer of the firm was unexpected and surprising.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm D1 Capital Partners is a leading shareholder in Outset Medical, Inc. (NASDAQ: OM) with 4.5 million shares worth more than $244 million.
Just like Erie Indemnity Company (NASDAQ: ERIE), Credicorp Ltd. (NYSE: BAP), and Proto Labs, Inc. (NYSE: PRLB), Outset Medical, Inc. (NASDAQ: OM) is one of the best 52-week low stocks to buy now.
8. Las Vegas Sands Corp. (NYSE: LVS)
Number of Hedge Fund Holders: 62
Price as of August 1, 2021: $42.35
Las Vegas Sands Corp. (NYSE: LVS) stock has plunged 28% over the past seven months. It is ranked eighth on our list of 10 best 52-week low stocks to buy now. The company owns and runs luxury resorts and is based in Nevada. In earnings results for the second quarter, posted on July 21, the firm reported earnings per share of -$0.26, missing market predictions by $0.09. The revenue over the period was $1.1 billion, up more than 1,000% year-on-year but missing market estimates by $220 million.
On July 22, investment advisory Stifel kept a Buy rating on Las Vegas Sands Corp. (NYSE: LVS) stock but lowered the price target to $65 from $77, noting that the recovery for the Asian gambling hubs had been a slow and painful process.
At the end of the first quarter of 2021, 62 hedge funds in the database of Insider Monkey held stakes worth $2.4 billion in Las Vegas Sands Corp. (NYSE: LVS), down from 63 in the previous quarter worth $3 billion.
Alongside Erie Indemnity Company (NASDAQ: ERIE), Credicorp Ltd. (NYSE: BAP), and Proto Labs, Inc. (NYSE: PRLB), Las Vegas Sands Corp. (NYSE: LVS) is one of the best 52-week low stocks to buy now.
7. Campbell Soup Company (NYSE: CPB)
Number of Hedge Fund Holders: 28
Price as of August 1, 2021: $43.72
Campbell Soup Company (NYSE: CPB) is a New Jersey-based firm that markets food and beverage items. It is placed seventh on our list of 10 best 52-week low stocks to buy now. The company’s shares have pulled back by 9% over the past year. On June 9, the firm posted earnings for the third fiscal quarter, reporting earnings per share of $0.57, missing market estimates by $0.09. The revenue over the period was $1.98 billion, down 11% year-on-year and missing estimates by $30 million.
On June 10, investment advisory Piper Sandler reiterated an Overweight rating on Campbell Soup Company (NYSE: CPB) stock but lowered the price target to $51 from $57, noting that the sales momentum of the firm would remain elevated in the near term.
At the end of the first quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $345 million in Campbell Soup Company (NYSE: CPB), down from 29 in the preceding quarter worth $347 million.
In addition to Erie Indemnity Company (NASDAQ: ERIE), Credicorp Ltd. (NYSE: BAP), and Proto Labs, Inc. (NYSE: PRLB), Campbell Soup Company (NYSE: CPB) is one of the best 52-week low stocks to buy now.
6. Autohome Inc. (NYSE: ATHM)
Number of Hedge Fund Holders: 18
Price as of August 1, 2021: $45.30
Autohome Inc. (NYSE: ATHM) is ranked sixth on our list of 10 best 52-week low stocks to buy now. The stock has plunged 48% over the course of the past twelve months. The company owns and runs an online platform for automobiles in China. In earnings results for the first quarter, posted on May 27, the firm reported earnings per share of $0.92, missing market estimates by $0.01. The revenue over the period was $281 million, up 28% year-on-year but missing estimates by $3.8 million.
On July 21, investment advisory Morgan Stanley downgraded Autohome Inc. (NYSE: ATHM) stock to Equal Weight from Overweight and reduced the price target to $50 from $106, noting that the firm was under pressure amid increased competition in the sector.
At the end of the first quarter of 2021, 18 hedge funds in the database of Insider Monkey held stakes worth $588 million in Autohome Inc. (NYSE: ATHM), up from 16 in the previous quarter worth $714 million.
Erie Indemnity Company (NASDAQ: ERIE), Credicorp Ltd. (NYSE: BAP), and Proto Labs, Inc. (NYSE: PRLB) are some of the best 52-week low stocks to buy now, just like Autohome Inc. (NYSE: ATHM).
In its Q4 2020 investor letter, Giverny Capital Asset Management LLC, an asset management firm, highlighted a few stocks and Autohome Inc. (NYSE: ATHM) was one of them. Here is what the fund said:
“Nevertheless, our partners at Giverny Capital Inc. in Montreal have owned Autohome for some time and we’re persuaded they’ve identified a terrific business. Autohome operates the leading auto information and listings website in China. The Chinese new car market is considerably larger than the US market in terms of units. Plus, there are more car brands in China than in the West and consumers are less familiar with them, as many households are just now buying their first car. That creates great demand for unbiased information about cars. Autohome has 39 million average daily users, and more 90 carmakers pay to advertise on its sites.
While the primary business is information about new cars, the used car market could become very important over time. In the US, roughly 2.5 used cars are sold each year for every new car. In China, the ratio is the opposite. As more people own cars in China, and as the country gets wealthier, the used car market should grow rapidly. Bloomberg estimates the used car market in China should double in size over the next five years. We think Autohome should be the leader there, too.
Finally, Autohome is majority-owned and managed by the Ping An insurance company. We view Ping An as one of the best companies in China and among the most reliable fiduciaries we could choose there. Autohome grew earnings by 26% per year from 2016-2019. The business is growing a bit slower during the pandemic, but earnings should rise about 12% in 2021, per Wall Street consensus. The company earns high returns on capital and has roughly $2 billion in net cash, or one-sixth of its market capitalization. We paid a high-teens multiple of 2021 earnings estimates for our shares.”
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Disclose. None. 10 Best 52-Week Low Stocks to Buy Now is originally published on Insider Monkey.
