5 Stocks Near 52-Week Lows But Still Worth Buying

The year has turned out to be rather challenging as far as stock prices are concerned. Oil price volatility, a strong U.S. dollar, China growth worries, sluggishness in other emerging markets, slumping commodities, and geopolitical tensions triggered uncertainty in the U.S. stock market. Also, the lack of clarity in terms of Federal Reserve’s tightening of monetary policy and the next rate hike don’t help matters.   

Amid this uncertainty, investors are often known to follow the “herd.” As a result, everyone seems to end up buying the same stocks, influenced by some specific favorable events. On the other hand, apprehensions about an impending event can make a massive number of investors sell their investment assets. As such, the market is often driven by the fear and greed of investors. Only if investors can hold their patience and invest in stocks that have strong long-term fundamentals, can they make money from even low priced stocks.

How to Choose Stocks?

While investing in low-priced stocks, one needs to select companies that have strong fundamentals and have the potential to overcome the current headwinds.

We have picked five stocks carrying a Zacks Rank #1 (Strong Buy) or 2 (Buy) with the help of our new style score system. These stocks are priced close to their 52-week low at the moment and offer an excellent bargain to investors.

5 Stocks to Look Out For

QLT Inc. QLTI  

Shares of this biotechnology company, which specializes in developing and commercializing innovative ocular products, dropped over 40% in the past year. Termination of its deal with InSite Vision Inc. in Sep 2015 was a huge setback for QLT as the deal would have added two approved products to QLT’s portfolio – AzaSite and Besivance – and boosted its product portfolio. With no marketed product in its portfolio, QLT's pipeline has just one product QLT091001. Any setback in the development of QLT091001 will hurt the stock significantly.

However, QLT091001, on approval, will target a market with unmet medical need due to the lack of approved therapies for indications like retinal diseases such as impaired dark adaptation, leber congenital amaurosis (LCA) and retinitis pigmentosa (RP). Moreover, the company is presently in discussions with the European regulatory authorities regarding the potential submission of a marketing application in the second half of 2016 for a conditional approval of QLT091001. Successful development and subsequent commercialization of QLT091001 will be a positive for the company.

We believe that the shares of this Zacks Rank #2 company are undervalued at present and, despite the lack of a big portfolio, it can be a worthwhile investment. The company’s shares hit a low of $2.07 on Apr 5, which is close to its 52-week low of $1.88.

Twitter, Inc. TWTR

Shares of this large cap social media company tumbled over 60% over the past year. The company’s sluggish user growth has been a major concern for the past few quarters. Currently, Twitter has 320 million monthly active users (MAUs).  Though the company is working hard to increase its user base, changing features which are unique to Twitter might estrange existing users, which isn’t an affordable proposition in the face of decelerating user growth.

However, Twitter has been benefiting from a rising number of increasing mobile users and its strategic acquisitions. Initiatives to improve user engagement and accelerate business expansion are the other positives

We believe that the shares of this Zacks Rank #2 company are undervalued at present, and despite the sluggish increase in the number of MAUs, it can be a good addition to your portfolio. The company’s share reached a low of $16.89 on Apr 5, which is close to its 52-week low of $13.91.

Aegerion Pharmaceuticals, Inc. AEGR

Shares of this biopharmaceutical company tumbled over 80% in the past year. Sales of the company’s key product, Juxtapid, used for the treatment of homozygous familial hypercholesterolemia (HoFH) have been hurt by the launch of PCSK9 inhibitors – Repatha and Praluent – in the U.S. market. Moreover, quite a few companies are working on bringing treatments for HoFH to market - some of these are in late-stage development or at a regulatory stage.

However, Aegerion is focusing on geographical expansion of Juxtapid. Approval in additional territories and label expansion should drive sales. In addition, Myalept, which is used for the treatment of generalized lipodystrophy (GL), is approved in the U.S. Myalept was acquired by Aegerion from AstraZeneca in Jan 2015 and should boost its revenues.  

We believe that investing in this Zacks Rank #2 stock can be a good move. The company’s shares reached a low of $3.36 on Apr 5, which is close to its 52-week low of $3.32.

Linn Co, LLC LNCO

Shares of this Houston based company tumbled over 90% in the past year. Linn is involved in the development of oil and gas resources.

This Zacks Rank #2 company has been seeing positive estimate revisions of late. Over the last 30 days, the Zacks Consensus Estimate for the first quarter of 2016 rose from a loss of 10 cents to a profit of 6 cents.  For fiscal 2016, the Zacks Consensus Estimate was up from a loss of 15 cents to a profit of 45 cents.  The company’s shares reached a low of 25 cents on Apr 5, which is close to its 52-week low of 14 cents.

Lenovo Group Limited LNVGY  

Shares of this Beijing-based company tumbled over 45% last year. Lenovo is a manufacturer of commercial and personal computers, servers, workstations, mobile Internet devices, notebooks, etc.

In 2016, Lenovo has entered into partnerships with some of the leading technology companies, including Alphabet Inc. GOOGL, Nexenta and Maxta. These partnerships will create new technologies, which should drive growth at this Zacks Rank #2 company in the near future. Lenovo’s shares reached a new 52-week low of $14.51 on Apr 5.

Though these companies are cheaply priced at the moment, they have strong fundamentals which promise long-term growth. Their technology and sound strategies will drive these companies over time.

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LENOVO GRP LTD (LNVGY): Free Stock Analysis Report
 
AEGERION PHARMA (AEGR): Free Stock Analysis Report
 
QLT INC (QLTI): Free Stock Analysis Report
 
LINN CO LLC (LNCO): Free Stock Analysis Report
 
ALPHABET INC-A (GOOGL): Free Stock Analysis Report
 
TWITTER INC (TWTR): Free Stock Analysis Report
 
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