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Holly LaFon
Holly LaFon
Articles (8059) 

International Stocks Trading at 52-Week Lows

May 09, 2011 | About:

This week, these international companies traded at 52-week lows: China Mobile Ltd. (NYSE:CHL), China Life Insurance Company Ltd. (NYSE:LFC), Gerdau S.A. (NYSE:GGB), AU Optonics Corp. (NYSE:AUO), National Bank of Greece (NBG).

China Mobile Ltd. (NYSE:CHL)

China Mobile Ltd. is traded at close to a 52-week low of $44.83 per share.

China Mobile offers mobile communications services principally using Global System for Mobile Communications or GSM, which is a pan-European mobile telephone system based on digital transmission and mobile communications network architecture with roaming capabilities. China Mobile Ltd. has a market cap of $184.48 billion; its shares were traded at around $45.97 with and P/S ratio of 2.57. The dividend yield of China Mobile Ltd. stocks is 1.79%.

China Mobile stock rose 54.3% over the last five years, but over the short term is has not fared as well. It fell 2.9% in the last year and 7.9% year to date. Last year its net income of $17.8 billion broke a 10-year record, and EBITDA is also the strongest in 10 years at $22.3 billion.

China Mobile is the largest mobile phone operator in the world. Its customer base grew from 584 million in fourth quarter 2010 to 600.8 million in first quarter 2011. But several factors are offsetting this dynamic growth in the eyes of investors. For instance, China Mobile reported that even though its customer base had increased, most of the new additions were low-usage customers and often used multi-cards to reduce their rates. The average revenue per user per month was down to 67 yuan last quarter from 76 yuan in the quarter prior. Average revenue per minute was also down to 0.13 yuan from 0.145 yuan in the same time span, as well as total minutes used which was down to 906 billion from 914.9 billion.

China Mobile is also facing increased competition from other mobile phone operators and challenges in growth due to an increased mobile phone penetration rate.

China Life Insurance Company Ltd. (NYSE:LFC)

China Life Insurance Company Ltd. (NYSE:LFC) is trading at close to a 52-week low of $51.57. In the last 52 weeks the stock traded as high as $70.71.

China Life Insurance Company Ltd. is a life insurance company based in China. China Life Insurance Company Ltd. has a market cap of $25.71 billion; its shares were traded at around $51.83 with a P/E ratio of 19.78 and P/S ratio of 0.45. The dividend yield of China Life Insurance Company Ltd. stocks is 1.55%.

Over the last five years China Life Insurance Company stock is up by 138.6%, but has been hard-hit over the short term. In the last year it declined by 20% and is down 15% year to date. Its yearly net income grew from $4.8 billion in 2009 to $5 billion in 2010. Its gross profit margin, however, has declined drastically from 43.8% in 2008, to 25% in 2009, to 23.6% in 2010. Gross profit for the company has grown to a 10-year record of $13,464 last year.

In the first quarter of 2010, first quarter net income was RMB 60.76, down 22.7% from the same period a year ago. Net cash flows per share in first quarter 2011 were RMB 2.15 per share, down 22.7% from last year.

China Life Insurance Company claims payable rose 38% from the fourth quarter 2010 to the first quarter of 2011 due to an increase in payable maturity benefits, and claims expenses rose 87.9% in the same time span. The company also faced a decline in first-quarter investment income of 6.4%.

Gerdau S.A. (NYSE:GGB)

Gerdau S.A. is trading at close to a 52-week low of $10.54.

A 101-year-old company, Gerdau S.A. is the largest long steel producer in Latin America, and has made an important contribution in building the history of the Brazilian industry. Gerdau S.Aa. has a market cap of $15.53 billion; its shares were traded at around $10.73 with a P/E ratio of 14.31 and P/S ratio of 0.82. The dividend yield of Gerdau S.A. stocks is 1.08%. Gerdau S.A. had an annual average earnings growth of 15.1% over the past 10 years.

Gerdau’s free cash flow rose to $1.6 billion in 2010, up from $466 million the year prior. In spite of this, its $1.4 billion net income was almost half of its $2.7 billion net income the year prior and its 2010 gross profit margin fell to a 10-year low of 17.6%. The company’s stock, which was up almost 30% over the last five years, has tumbled almost 25% in the last year and almost as much year to date.

In the first quarter of 2011, Gerdau’s profit fell 23% due to rising production and raw-material costs. The news sent the stock down to a 52-week low.

AU Optonics Corp. (NYSE:AUO)

AU Optronics Corp. is trading at close to a 52-week low of $8.05.

Au Optronics Corp. is a Korea-based world-manufacturer of large-size thin film transistor liquid crystal display panels, which are currently the most widely used flat panel display technology. Au Optronics Corp. has a market cap of $7.19 billion; its shares were traded at around $8.15 with and P/S ratio of 0.44.

AUO’s consolidated revenue fell 9.1% in the first quarter 2011 to USD$3.2 billion. It had a gross profit loss of USD$213 million with a gross margin of -6.7%. Over the last five years the company’s stock fell 47%, and is down almost 20% year to date.

AUO’s first-quarter poor earnings were due to weaker-than-expected TV panel prices and NT dollar appreciation. IT panel prices have stopped declining and begun to increase gradually in the first quarter of 2011. The company expects TV panel prices to bottom out and capacity utilization rates to improve over the quarter. To bring in more revenue next quarter, it is adjusting its product portfolio and expects growth on its high-end products.

National Bank of Greece (NBG)

National Bank of Greece is traded at close to 52-week low of $1.4.

National Bank of Greece provides a full range of financial products and services to corporate customers and private individuals alike, including retail and corporate lending, investment banking services, insurance, asset management, brokerage, leasing and factoring. National Bank of Greece has a market cap of $4.25 billion; its shares were traded at around $1.4 with a P/E ratio of 10.77 and P/S ratio of 0.46.

The bank’s stock has fallen 85% in the last five years and 16% year to date.

In 2008 National Bank of Greece had free cash flow of over $7 billion. In 2008 it had a loss of 688 million. In 2009 its net income rose to $922 million but fell to $573 million in 2010. The bank relied on funding from the European Central Bank was 19.9 billion euros at the end of the fourth quarter, a decrease from 22.8 billion euros in the third quarter.

The Greek bank was plunged into financial difficulty when Greece began a recession around 2008. According to the bank’s CEO, Apostolos Tamvakakis, 2011 is expected to be the last year of Greece’s recession. The bank has a tier 1 ratio (indicator of financial strength) of 13.1%, compared to Bank of America’s 11.3%, due in large part to a 1.8 billion euro rights offering. The bank’s bad loans comprise 8.5% of its portfolio. The general financial trouble in the area is also hindering the bank’s recovery. The Unemployment rate in Greece is roughly 15% and GDP dropped 4.5% last year.

For more guru-owned international stocks trading at 52-week lows, go to GuruFocus list of 52-week international lows.

Rating: 3.3/5 (12 votes)


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