Better at Half the Price? 3 Stocks at 52-Week Lows to Buy Now

It’s not straightforward to discover discount shares to purchase when the inventory market frequently retains hitting new all-time highs. The S&P 500 is sitting above $5,431 at the second, a 14% achieve in 2024 and 23% increased than the place it stood 12 months in the past.

Because a rising tide tends to carry all boats that don’t have holes in them, particular person shares are flying excessive too. 1 / 4 of all shares buying and selling on the broad-market index have gained greater than the index itself. More than 60% are buying and selling in optimistic territory. 

That’s why contrarian traders go fishing in the shallow finish of the pond. They search for shares at or near their 52-week lows to purchase as a result of there are some actual lunkers to be discovered there. These massive fish obtained caught up in the weeds and needs to be primed to flip round.

Not all shares hitting backside needs to be purchased. Many occasions they’re low cost for a cause. But the three shares beneath aren’t broken. Although they’re at 52-week lows, they continue to be a prize catch to purchase.

Mosaic (MOS)

Source: T. Schneider / Shutterstock.com

Fertilizer large Mosaic (NYSE:MOS) is the first inventory at a 52-week low to purchase. The potash producer was knocked decrease as a result of pricing for the key agricultural ingredient is at traditionally low costs.

Potash is crucial for crop development. Right after the pandemic and due to provide chain constraints, costs for potash soared It at present sells for roughly $305 per metric ton. Although that’s above February’s low of $289 per metric ton, it stays 75% beneath the $1,202 per metric ton value hit in April 2022. Expect costs to preserve rising going ahead.

Farmers want potash to enhance crop yields, which can carry pricing however it should doubtless stabilize additional out.

Mosaic’s inventory, nonetheless, has fallen together with potash costs. Shares are down about 60% since these heady post-pandemic days. At $28 a share MOS inventory is at a degree not seen since the pandemic. There are a number of tailwinds to push it increased together with extra dependable provide from its Esterhazy potash mine, the want to enhance potash utilization in rising markets like India and China, and electrical automotive batteries, which use potash and will eat giant percentages of accessible provide.

Mosaic seems like a inventory that hit backside however is poised to rebound a lot increased.

Ambev (ABEV)

Brazilian brewer Ambev (NYSE:ABEV) is subsequent on the listing of shares at 52-week lows to purchase. While its dwelling nation accounts for 54% of whole income and 49% of working earnings, Ambev has a dominant place all through Central and South America. The brewer owns an 81% share of the quantity market in Argentina and a 61% share in Peru. In Brazil, Ambev owns 68% of the market.

Sliding revenue margins due to the pandemic that raised commodity prices have but to recuperate to their earlier highs and weigh on Ambev inventory. Beer consumption can also be falling, although not almost as sharply as here in the U.S. It might be extra of a brief situation than a secular decline and the brewer has loads of alternative to recuperate from its current lows.

ABEV inventory hasn’t traded this low since the late-2000s (excluding the pandemic). As commodity costs revert to the imply, Ambev ought to see some profit to its backside line. Similarly, the ongoing premiumization of beer that occurred in the U.S. is occurring south of the border too. That ought to enhance Ambev’s revenue margins and lift its inventory value as properly.

Brown-Forman (BF-A, BF-B)

Source: T. Schneider / Shutterstock.com

In that very same vein, distiller Brown-Forman (NYSE:BF-A, NYSE:BF-B) deserves your consideration in addition to a beaten-down inventory prepared to stand up once more. It is the proprietor of certainly one of the world’s most recognizable whiskey manufacturers, Jack Daniels, but in addition Herradura tequila, Chambord liqueur and Korbel champagne.

Despite sitting atop the Tennessee whiskey and Kentucky bourbon markets, gross sales of Jack Daniels are slumping. Management mentioned it was a “difficult year for spirits.” Still, whiskey stays a preferred class and its premium positioning places it in the prime place to seize future gross sales.

Previously, Brown-Form was very narrowly targeted on whiskey. It shored up that deficit by making acquisitions of super-premium manufacturers in gin and rum. They usually are not doubtless to be important income contributors instantly however present a base from which to develop.

At $42 per share, Brown-Forman inventory hasn’t traded this low since 2017. It marks a wonderful entry level for an investor searching for firm buying and selling at years-long lows.

On the date of publication, Rich Duprey didn’t maintain (both straight or not directly) any positions in the securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Guidelines.