3 Value Stocks to Buy at a 52-Week Low in May


  • Consider buying these blue-chip names while they are on sale.
  • Target (TGT): The discount retailer’s stock has fallen 10% on a lackluster earnings print. 
  • Under Armour (UA): The company is undertaking a costly restructuring as its share price languishes. 
  • Chevron (CVX): The oil major’s stock was the most shorted security on Wall Street in April.  
Value Stocks at a 52-week low - 3 Value Stocks to Buy at a 52-Week Low in May

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The stock market rally rolls on. After a brief downturn in April, the benchmark S&P 500 index is back at an all-time high in May. Investors on the hunt for deals may find the current market isn’t offering many. With stock prices hitting 52-week and all-time highs each day, it can be difficult for value-oriented investors to sniff out undervalued securities.

That said, there are some deals to be had amidst the current euphoria. Some blue-chip names and well-known brands have share prices that are slumping right now, brought lower by earnings misses, lowered guidance, costly restructuring plans, and external factors beyond their control. Stocks of some once mighty companies are now sliding towards a 52-week low even as the broader market touches new highs.

Here are three value stocks to buy at a 52-week low.

Target (TGT)

tgt stock
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Investors might want to buy into the post-earnings selloff in Target (NYSE:TGT). The stock has fallen 10% since the discount retailer posted mixed financial results for this year’s first quarter. The Minneapolis-based company announced EPS of $2.03 versus $2.06 that was forecast among analysts. It was the first time since Nov. 2022 that Target missed profit expectations.

Revenue in the first three months of the year totaled $24.53 billion compared to $24.52 billion that was anticipated on Wall Street. Target’s sales were down 3% from a year ago. Customer traffic, which includes both online and in-store shopping, fell 1.9% in Q1. The average amount that customers spent per visit declined 2%. Same-store sales also decreased 3.7% as shoppers bought fewer discretionary items such as apparel and products for the home.

While things might look bleak right now, Target is trying to attract price sensitive consumers by relaunching its loyalty rewards program and cutting prices on thousands of items such as milk and diapers. TGT stock is down 2% over the last 12 months.

Under Armour (UA)

Under Armour on Michigan Avenue in Chicago
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Down 20% on the year and close to a 52-week low is athletic apparel company Under Armour (NYSE:UA). The stock has taken a drubbing after Under Armour announced a major restructuring plan and lowered its forward guidance for the remainder of this year. The Baltimore-based company announced restructuring charges of as much as $90 million, including severance packages for laid off employees.

Under Armour said that for its current fiscal year, it expects revenue to be down at a low-double-digit percentage rate. The company sees earnings over the next year at between 18 cents and 21 cents per share. Analysts had expected earnings of 59 cents a share. The brand overhaul and lower guidance come as Under Armour struggles to compete with rivals such as Nike (NYSE:NKE).

Over the last five years, UA stock has fallen 69%. The shares are now trading at just 12 times future earnings estimates. If you believe the turnaround strategy will work, then here would be a good place to take a position.

Chevron (CVX)

Chevron (CVX) sing with "diesel," "food mart" and "car wash" written underneath
Source: Sundry Photography / Shutterstock.com

Not only is oil major Chevron’s (NYSE:CVX) stock flat over the last 12 months, but it was was the most shorted stock on Wall Street during the market downturn in April of this year. Data from market research firm Hazeltree shows that Chevron replaced electric vehicle maker Tesla (NASDAQ:TSLA) as the most shorted large cap U.S. stock in April. A short position is a bet that a stock price will decline.

Tesla had long been the most heavily shorted stock on Wall Street owing to its rich valuation. But last month, Chevron’s stock rose to 9% from 7%, pushing it past Tesla, according to Hazeltree. The shorting of Chevron’s stock came as crude oil prices slumped throughout April. Chevron also reported Q1 results financial that missed Wall Street forecasts as the company struggles with weak energy prices and compressed refining margins.

Wall Street also doesn’t like Chevron’s proposed $53 billion acquisition of Hess Corp. (NYSE:HES), which is winding its way through regulatory approvals. Over five years, CVX stock has risen only about 30%, trailing the 87% gain in the S&P 500 index during the same period. Chevron’s stock is currently trading at 14 times future earnings estimates and offers a dividend yield of 4%.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

Article printed from InvestorPlace Media, https://investorplace.com/2024/05/3-value-stocks-to-buy-at-a-52-week-low-in-may/.

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