Trying to seek out the markets most undervalued and undiscovered value stocks can be tricky. However, the 52-week low bargain bin never fails to throw up some interesting ideas.
So, here are just five former market darlings that have fallen from grace during the past few months and now trade at or near 52-week lows.
First up isWilliam Hill(LSE: WMH). William Hill crashed to a 52-week low after issuing a profit warning last week. During the third quarter, the companys revenue fell by 9%, and operating profit declined by 39%.
The companys shares now trade at a forward P/E of 13.6 and support a dividend yield of 4%. That said, William Hills earnings are expected to stagnate over the next two years so investors wont see much in the way of capital growth over this period.
Oil & gas causalities
Investors have turned their backs on engineering groupWeir(LSE: WEIR) owingto the companys exposure to the oil & gas industry.
City analysts have slashed their earnings estimates for the company and now expect the group to report earnings per share of 58p for 2015. Thats a massive drop from the EPS of 143p for full-year 2015 that analysts were forecastinga year ago. But Weir still trades at a high valuation of 18.2 times forward earnings, so the companys shares could have further to fall.
Hunting (LSE: HTG) is another company thats suffering from the slowdown in capital spending across the oil & gas industry. And despite the fact that City analysts believe Huntings earnings per share will slump a staggering 84% this year, the companys shares still trade at an eye-watering forward P/E of 38.2.
Further, even though analysts expect Huntings earnings to rebound by 53% in 2016, the group is trading at a 2016 P/E of 21.8. The companys shares support dividend yield of 2.3%.
Time to buy
On the other hand, engineering firmSmiths (LSE: SMIN) could be a bargain. The companys shares currently trade at a three-year low and their lowest valuation for five years. Smiths currently trades at a forward P/E of 12.5, below its five-year average of 13.6. Also, the companys shares now support a dividend yield of 4%. The dividend payout is covered twice by earnings per share.
And finallyPearson (LSE: PSON), the former owner of the Financial Times, which has realigned its business towards education. Year-to-date Pearsons shares have slumped by around a third as the company has failed to meet lofty targets for growth. Around aweekago the companys shares lost as much as 25% over two days after the grouplowered its full-year profit guidance by 10%.
Pearson had been guiding for earnings per share of between 75p and 80p but now expects the figure to be at the bottom end of a new range of 70p to 75p, owing to continued challenges in its operating divisions. The sale of the FT, Economist and PowerSchoolcaused earnings forecasts to fall by around 5p andlower Community College enrolments in the US have also weighed on the companys outlook.
Based on the companys revised earnings forecast Pearson currently trades at a forward P/E of 12.8 and supports a yield of 6.1%. The dividend payout is covered 1.3 times by earnings per share so, at the very least Pearson looks like an attractive income investment.
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