Guru Held Stocks Near 52-Week Lows

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Sep 03, 2014
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As the market reaches new highs, I searched for stocks that have yet to participate in this year’s gains. Below are some of the most widely held stocks by the investing gurus that are trading near their 52-week lows.

CA Inc (CA) closed at $28.65 on 9/2/2014, near its 52-week low of $27.84. The stock is down 20.89 percent from its 52-week high of $36.22 on 1/22/2014. CA is one of the world’s largest providers of information technology (IT) management software and solutions. The majority of the Global Fortune 500 relies on CA to help manage their IT environments. The company’s earnings were flat in fiscal year 2014 but are expected to increase by 19.3 percent in 2015. The dividend yield is a high 3.50 percent and should help provide some support for the price. The stock is held by 18 gurus we follow with James Barrow of Barrow, Hanley, Mewhinney & Strauss holding the largest position of 11.5 million shares, representing 2.59 percent of the shares outstanding.

Market Cap: 12.75 billion, P/E: 15.80

Business Predictability: 1/5, Financial Strength: 6/10, Profitability & Growth: 8/10

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Transocean Ltd (RIG) closed at $37.98 on 9/2/2014, near its 52-week low of $37.33. The stock is down 31.86 percent from its 52-week high of $55.74 on 11/11/2013. Transocean is a leading international provider of offshore contract drilling services for oil and gas wells with a fleet of 79 rigs. It specializes in technically demanding sectors of the offshore drilling business with a particular focus on deepwater and harsh environment drilling services. The stock is cheap based on its P/E ratio of 7.8 and P/B ratio of 0.80 if it can maintain its earnings and book value. Transocean actually nearly doubled earnings in the second quarter and has been able to maintain its book value. The overall concerns about stronger competition and lower capex spending by the oil and gas producers is an industry wide issue for the offshore services companies. The dividend yield is currently a high 7.8 percent based on its last payment. The stock is held by 15 gurus we follow with PRIMECAP Management holding the largest position of 31.5 million shares, representing 8.69 percent of the shares outstanding.

Market Cap: 13.76 billion, P/E: 7.80

Business Predictability: 1/5, Financial Strength: 6/10, Profitability & Growth: 6/10

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Talisman Energy Inc (TLM) closed at $9.95 on 9/2/2014, near its 52-week low of $9.63. The stock is down 25.64 percent from its 52-week high of 13.38 on 10/8/2013. Talisman is a global upstream oil and gas company that is headquartered in Calgary and has two main operating areas, the Americas and Asia-Pacific. Earnings per share and book value per share has been dropping since 2011 and have not stabilized yet. The price has had strong support near $10 or more than two years. This is a stock to be wary of on a technical basis if it cannot hold its current price. The stock is held by 12 gurus we follow with Carl Icahn of Icahn Capital Management holding the largest position of 76.1 million shares, representing 7.36 percent of the shares outstanding.

Market Cap: 10.26 billion, P/E: N/A

Business Predictability: 1/5, Financial Strength: 5/10, Profitability & Growth: 5/10

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FMC Corporation (FMC) closed at $65.97 on 9/2/2014, near its 52-week low of $65.51. The stock is down 21.41 percent from its 52-week high of $83.94 on 3/10/2014. FMC is a diversified chemical company serving agricultural, consumer and industrial markets globally with innovative solutions, applications, and market-leading products. Its three business segments are FMC Agricultural Solutions, FMC Health and Nutrition and FMC Minerals. The stock has more than doubled over the past few years and was likely due for a pullback. FMC is planning on spinning off its minerals division in 2015. FMC Minerals produces soda ash and lithium. The new company could be an excellent play on the continuing increase in lithium demand for batteries. The stock is held by 11 gurus we follow with Daniel Loeb of Third Point holding the largest position of 1.55 million shares, representing 1.16 percent of the shares outstanding.

Market Cap: 8.81 billion, P/E: 40.50

Business Predictability: 5/5, Financial Strength: 8/10, Profitability & Growth: 8/10

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Ensco Plc (ESV) closed at $48.93 on 9/2/2014, near its 52-week low of $47.85. The stock is down 21.4 percent from its 52-week high of $62.25 on 11/14/2013. Ensco is a global offshore contract drilling company. It owns the world’s second largest offshore drilling rig fleet of 77 rigs with the newest ultra-deepwater fleet in the industry and largest premium jackup fleet. Just like Transocean, Ensco is being dragged down by industrywide concerns. The stock is cheap priced on a P/B ratio of 1.00 if it can maintain its book value. So far this year it has not been able to. I would hold off on this one for now in favor of Transocean until there is some more stability. Ensco’s stock is held by 10 gurus we follow with First Pacific Advisors holding the largest position of 1.94 million shares, representing 0.83 percent of the shares outstanding.

Market Cap: 11.46 billion, P/E: 11.06

Business Predictability: 1/5, Financial Strength: 6/10, Profitability & Growth: 8/10

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Mattel Inc (MAT) closed at $34.58 on 9/2/2014, near its 52-week low of $34.30. The stock is down 27.87 percent from its 52-week high of 47.94 on 12/30/2013. Mattel designs, manufactures and markets a broad variety of toy products worldwide which are sold to its customers and directly to consumers. Its well-known brands include Barbie, Hot Wheels, Fisher Price and American Girl. Earnings per share have been in a downward trend for the year and might lead the stock further down. It is currently trading at about its 10-year median P/E ratio of 15.1. The stock is held by 9 gurus we follow with Brian Rogers of the T Rowe Price Equity Income Fund holding the largest position of 8.11 million shares, representing 2.39 percent of the shares outstanding.

Market Cap: 11.68 billion, P/E: 14.80

Business Predictability: 1/5, Financial Strength: 8/10, Profitability & Growth: 7/10

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Diamond Offshore Drilling Inc (DO) closed at $42.96 on 9/2/2014, near its 52-week low of $42.85. The stock is down 30.61 percent from its 52-week high of $61.91 on 9/18/2013. Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe with a fleet of 44 drilling rigs, including five rigs under construction. The opportunity lies within the parent company, Loews Corp (L). Loews is trading at a P/B ratio of 0.80. Buying the parent company is equivalent to buying CNA Financial (CNA), Diamond Offshore (DO), Boardwalk Pipeline (BWP), and HighMount Exploration and Production while receiving Loew’s hotel business for free. Diamond Offshore’s stock is held by 9 gurus we follow with Brian Rogers of the T Rowe Price Equity Income Fund holding the largest position of 3.75 million shares, representing 2.73 percent of the shares outstanding.

Market Cap: 5.89 billion, P/E: 14.10

Business Predictability: 1/5, Financial Strength: 7/10, Profitability & Growth: 5/10

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Scanning through the 52-week lows is a good way to start your bargain hunting. Finding stocks that are widely held by the gurus will help provide confirmation since they have more than likely done their homework.

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