This article by Usman Kabir with my photo is in today's Yahoo! Finance.
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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.
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.”
5. Axsome Therapeutics, Inc. (NASDAQ: AXSM)
Number of hedge fund holders: 17
Price as of August 1, 2021: $48.59
Axsome Therapeutics, Inc. (NASDAQ: AXSM) is a New York-based biopharma company. It is placed fifth on our list of 10 best 52-week low stocks to buy now. The company’s shares have declined 31% over the course of the past year. On May 10, the firm posted earnings for the first quarter, reporting earnings per share of -$0.78, beating market predictions by $0.04. The firm has a market cap of over $1.8 billion. The short interest on the stock is more than 9%. The firm was founded in 2012.
On June 10, investment advisory Berenberg assumed coverage of Axsome Therapeutics, Inc. (NASDAQ: AXSM) stock with a Buy rating and a price target of $112. Esther Hong, an analyst at the firm, issued the ratings update.
At the end of the first quarter of 2021, 17 hedge funds in the database of Insider Monkey held stakes worth $354 million in Axsome Therapeutics, Inc. (NASDAQ: AXSM), down from 22 in the previous quarter worth $523 million.
4. Kemper Corporation (NYSE: KMPR)
Number of Hedge Fund Holders: 11
Price as of August 1, 2021: $66.01
Kemper Corporation (NYSE: KMPR) stock has declined 15% over the past twelve months. It is ranked fourth on our list of 10 best 52-week low stocks to buy now. The company is based in Illinois and markets insurance services. In earnings results for the second quarter, posted on July 29, the firm reported earnings per share of -$0.82, missing estimates by $2.19. The revenue over the period was $1.3 billion, up more than 22% compared to the revenue over the same period last year but missing predictions by $20 million.
On July 19, investment advisory Raymond James downgraded Kemper Corporation (NYSE: KMPR) stock to Market Perform from Strong Buy and reduced the price target to $80 from $90, noting that inflation could limit upside potential for the stock in the near term.
At the end of the first quarter of 2021, 11 hedge funds in the database of Insider Monkey held stakes worth $432 million in Kemper Corporation (NYSE: KMPR), down from 13 the preceding quarter worth $444 million.
In its Q2 2020 investor letter, Brown Advisory, an asset management firm, highlighted a few stocks and Kemper Corporation (NYSE: KMPR) was one of them. Here is what the fund said:
“Kemper Corporation is a diversified insurance provider with a profitable specialty segment offering nonstandard private auto insurance coverage. The company is efficiently run by a disciplined management team and trades at an attractive valuation. As a result of well-executed acquisitions and organic growth, specialty now contributes to more than two thirds’ of Kemper’s net earned premiums. It is complemented by an improving preferred property and casualty business and stable life and health insurance operation that produces consistent cash flow.”
3. Proto Labs, Inc. (NYSE: PRLB)
Number of Hedge Fund Holders: 18
Price as of August 1, 2021: $78.19
Proto Labs, Inc. (NYSE: PRLB) is placed third on our list of 10 best 52-week low stocks to buy now. The company’s shares have plunged 34% over the past twelve months. The company owns and runs an online platform that markets the development and delivery of on-demand production parts. On July 29, the firm posted earnings for the second quarter, reporting earnings per share of $0.39, missing market predictions by $0.05. The revenue over the period was $123 million, up 15% year-on-year.
On May 21, investment advisory Craig-Hallum maintained a Hold rating on Proto Labs, Inc. (NYSE: PRLB) stock and lowered the price target to $90 from $97, noting near term margin pressures and negative earnings revisions could impact the firm.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm ARK Investment Management is a leading shareholder in Proto Labs, Inc. (NYSE: PRLB) with 3.6 million shares worth more than $444 million.
In its Q1 2021 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and Proto Labs, Inc. (NYSE: PRLB) was one of them. Here is what the fund said:
“Shares of Protolabs, a provider of 3D printing and other rapid prototyping and mold machining services for manufacturing, extended their strong performance from last year and soared early in January after the company announced its intention to acquire another on-demand digital manufacturing platform. We took advantage of their runup to sell our position.”
2. Credicorp Ltd. (NYSE: BAP)
Number of Hedge Fund Holders: 22
Price as of August 1, 2021: $100.96
Credicorp Ltd. (NYSE: BAP) stock has pulled back 20% over the past year. It is ranked second on our list of 10 best 52-week low stocks to buy now. The firm operates as a financial services firm and is based in Peru. It has a market cap of over $8 billion and posted more than $2 billion in revenue last year. Some of the finance services offered by the firm include insurance, pensions, loans, credits, deposits, and wealth management. The firm was founded in 1889 and employs over 36,000 people.
On June 9, investment advisory Citi downgraded Credicorp Ltd. (NYSE: BAP) stock to Sell from Neutral, reducing the price target to $114 from $195, noting higher short-term uncertainty around the firm and its earnings results.
At the end of the first quarter of 2021, 22 hedge funds in the database of Insider Monkey held stakes worth $236 million in Credicorp Ltd. (NYSE: BAP), up from 15 in the previous quarter worth $203 million.
1. Erie Indemnity Company (NASDAQ: ERIE)
Number of Hedge Fund Holders: 12
Price as of August 1, 2021: $184.89
Erie Indemnity Company (NASDAQ: ERIE) is ranked first on our list of 10 best 52-week low stocks to buy now. The stock has declined in value by 12% over the course of the past twelve months. The firm operates in the property and casualty insurance sector and is based in Pennsylvania. It has a market cap of over $8 billion and posted more than $2.5 billion in revenue last year. Some of the services it provides include sales, underwriting, policy issuance, and renewal services, among others, for policyholders.
In earnings results for the second quarter, posted on July 29, Erie Indemnity Company (NASDAQ: ERIE) reported earnings per share of $1.51, in line with market predictions. The revenue over the period was more than $680 million, beating estimates by close to $13 million.
At the end of the first quarter of 2021, 12 hedge funds in the database of Insider Monkey held stakes worth $616 million in Erie Indemnity Company (NASDAQ: ERIE), up from 7 in the previous quarter worth $448 million.
