The markets declines over the past three weeks have thrown up some fantastic bargains for investors to take advantage of.
So, here are just five former market darlings that have fallen from grace during the past few months and which now trade at, or near, 52-week lows.
Trading improving
Controversial companyBlur Group (LSE: BLUR) plunged to a 52-week low at the beginning of thisweek, as investors continued to express concern about the sustainability of the companys business model. However, the companys shares have rebounded in the past two days, after Blur issued an upbeat fourth quarter and full-year trading update on Wednesday.
In the announcement, Blur revealed that it had been able to significantly reduce group cash burnto an underlying $1.5m in Q4 2015 from $3.6m in Q3 2015, which has, to some extent, alleviated concerns about the companys cash burn. Further, the company revealed in its trading update that reportedearnings before interest, tax, depreciation and amortisation (EBITDA) for 2015 are expectedto be slightly ahead of market expectations with sequential, quarterly improvement.
So, after years of floundering, Blur Group finally seems to be heading in the right direction. Still, analysts dont expect the company to report a profit in the near-term and for this reason, the companys shares are difficult to value at present.
Wait and see
Kingfisher (LSE: KGF) plunged to a new 52-week low this week after the company warned on profits and announced a new five-yeartransformation programme. The plan is designed to unlocka 500m sustainable annual profit uplift, but it will cost the group50m hit in the first year, and between 70m and 100m in the second year.
Kingfisher plans to return to the majorityof the additional profits generated from this transformation plan to shareholders. Management is targeting acapital return of 600m over the next three years,most likely via a share buyback in addition to the annual ordinary dividend. Kingfisher currently supports a yield of 2.8%.
Unfortunately, many analysts dont believe that Kingfishers transformation plan will produce the results management is targeting and its easy to see why. Kingfishers pre-tax profit hasnt grown for the past five years, despite an aggressive cost-cutting and restructuring plan. The shares currently trade at a forward P/E 16.6 which looks expensive.
Overall, it might be wise to avoid Kingfisher until the companys second major transformation plan starts to yield results.
Quality at a reasonable price
After a difficult 2015, shares inA.G. Barr (LSE: BAG) hit a 52-week nadir last week as broader market declines dragged the companys shares lower.
For long-term investors, thought, A.G. Barr could be a great investment at present levels. The soft drinks group is a relatively defensive investment and sales are still growing. Like-for-like sales for the 18 weeks to 28 November were up 3.9%, putting a difficult start to the year behind the company.
A.G. Barrs shares currently trade at a forward P/E of 17.6, which isnt overly expensive for a business thats been able to grow profits and shareholder equity at a compound annual rate of 10% for the past five years.
Want to become a millionaire?
Buying out-of-favour stocks is a proven way to profit from volatilemarkets.With this in mind, our analysts here at the Motley Fool have put togetherthis strategy to helpYOU unearth those massive, market-thrashingopportunities that could put you on the path to substantial long-term wealth. The strategy is designed to help you build a million-pound fortune by following strategic steps.
Thereport explainshow spending just 20 minutes a month could help you create a portfolio that could bring you closer to financial freedomfor life.
Click hereto check out the report -it’s completely free and comeswith nofurther obligation.
Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.