The stock market started off July with a bit of a rally. Many stocks have advanced smartly from their recent lows, though the last few days have been rough. That leaves investors wondering what absolute bargains are still out there in the market right now. And one way to answer that question is to look at stocks trading at a 52-week low.
These following seven stocks are still trading within 5% of their 52-week lows, based on their closing prices on July 13. For whatever reason, traders haven’t gravitated back into these stocks, and thus they can still be bought near their lowest points of the past year.
From autos to spirits to airlines and more, there’s a lot of value in this list of stocks trading at a 52-week low. Let’s dig in.
| TM | Toyota | $155.44 |
| DIS | The Walt Disney Company | $92.94 |
| MDT | Medtronic | $87.91 |
| DEO | Diageo | $173.83 |
| MMM | 3M | $128.37 |
| DLR | Digital Realty Trust | $122.86 |
| RYAAY | Ryanair | $67.93 |
Toyota Motor (TM)
Toyota Motor (NYSE:TM) is one of the largest companies in the world, and it’s also currently a stock trading at a 52-week low — just over 2% above that level.
It’s also one of the most promising stocks for a quick comeback.
That’s because much of Toyota’s decline is due to its geography rather than its own business. As Toyota is based out of Japan, it reports financial results in yen and is principally traded on the Japanese stock exchange. Japanese assets have been tumbling in large part thanks to the yen’s precipitous decline against the U.S. dollar since early 2021.
When the yen tanks, it makes the value of TM stock appear to be less, in dollars, than before. In actuality, however, Toyota will become more profitable with a weaker yen as its operating costs decline.
As it is, shares are already trading at around 10 times earnings as shares slide back to near pre-pandemic levels. With supply chain and semiconductor shortages now clearing up, however, the future should look brighter for Toyota going forward.
Walt Disney (DIS)
The Walt Disney Company (NYSE:DIS) has suffered enough. I’ve been repeatedly negative on DIS stock in the past. But when the share price gets cut in half, that’s enough to change the outlook for Disney.
The problem has primarily been with the streaming business. Shares of streaming leader Netflix (NASDAQ:NFLX) have collapsed this year, as investors demand immediate profits rather than future growth. As I recently argued, investors are far too negative on NFLX stock now.
By extension, that excessive trading pessimism also applies to Disney. That’s because investors often value one company based on a comparable company; as Netflix’s valuation has plummeted, competitors like Disney have also gotten written down in sympathy.
But Disney is more than just streaming. The theme parks, for example, are enjoying record visitor numbers as travel comes roaring back from the pandemic shutdowns. In addition, Disney retains a far broader library of legacy content and intellectual property than rivals like Netflix.
There’s no denying that Disney still has some serious challenges to deal with in coming months. However, DIS stock now fully reflects these concerns.
Medtronic (MDT)
Medtronic is one of the world’s largest medical device companies. The sector got hammered in the wake of the novel coronavirus, as hospitals delayed elective surgeries to save beds for emergencies. Additionally, patients were understandably nervous about being in hospitals and potentially being exposed to Covid-19 in the process.
The sector picked back up in 2021 as things started to normalize, but now supply chain issues and inflation have sent leading medical device companies back to their 52-week lows. This is nothing particular to Medtronic (NYSE:MDT) in particular, as many of its peers have followed a similar trajectory over the past 18 months.
In any case, MDT stock specifically is now offering a 3.1% dividend yield and sells for less than 16 times forward earnings. Both of those are attractive figures compared to Medtronic’s historical valuation ranges.
Diageo (DEO)
Diageo (NYSE:DEO) is one of the world’s largest spirits companies. Its brands include but are hardly limited to Johnnie Walker, Tanqueray, Baileys, Don Julio, and Guinness beer.
The alcohol industry is a great one for several reasons. Profit margins are massive, as input costs are low. Competition tends to be manageable, as people gravitate to brands with a long and storied history. Finally, alcohol demand tends to be roughly the same, regardless of economic conditions.
Diageo, along with other spirits companies, have sold off recently on supply chain and inflation concerns. And sure, earnings may dip in 2022. Over the longer-term, however, alcohol companies can easily offset inflation with price hikes.
Meanwhile, Diageo should benefit as global travel picks back up leading to more on-premise consumption. The upcoming World Cup this fall will be another near-term driver for increased beverage consumption.
3M (MMM)
3M (NYSE:MMM) is a large, diversified industrial company. It makes everything from its Post-It notes to safety helmets and dental equipment among its dozens of lines of business.
The company is also a superior growth and income play. It has increased its dividend an astounding 63 years in a row, and the current dividend yield is a juicy 4.6%.
Shares are currently depressed due to some product liability lawsuits, along with general recessionary fears. However, MMM stock is a bargain for those with patience to wait out the current economic unease.
The company raises its dividend year in and year out, regardless of broader economic concerns, and shares currently sell for less than 12 times forward earnings.
Digital Realty Trust (DLR)
Digital Realty Trust (NYSE:DLR) is one of the world’s largest real estate investment trusts (REITs) that focuses on the digital infrastructure space.
It began primarily focused on providing generic wholesale data center capacity. This business grew tremendously but has seen margins compress in recent years as more competition has entered the arena. Digital Realty has astutely adjusted its portfolio to add more higher-value services, such as interconnection and colocation services for specific tenants.
DLR stock is now essentially flat since the start of the pandemic. That comes even as demand for internet bandwidth has grown substantially over the past two years. Like so many tech-related stocks, Digital Realty has gotten punished for being a perceived loser amid economic reopening.
The actual financial results, along with the company’s dividend, are as strong as ever, however, and shares are set to rebound.
Ryanair Holdings (RYAAY)
It appears that the price of crude oil is finally rolling over. The benchmark West Texas Intermediate (WTI) crude price topped $125 per barrel following Russia’s invasion of Ukraine. Now, however, the price has slipped back to under $100. Meanwhile, jet fuel prices are also declining significantly as pressure is easing on the oil refining system.
All this is great news for the airlines, as jet fuel is one of their biggest input costs. That’s especially true for discount airlines, such as Europe’s giant Ryanair Holdings (NASDAQ:RYAAY). Since discount airlines have lower overhead costs for things such as airplane leases and staff, jet fuel is a proportionally bigger piece of their cost picture. So, the current drop in oil is a big relief.
Meanwhile, global travel demand has continued to surge back as economies reopen. In fact, demand has gotten so steep that many airports are struggling to cope with the flood of additional travelers. This is leading to short-term headaches, but is nothing but positive for airlines like Ryanair over the longer-term.
On the date of publication, Ian Bezek held a long position in DEO, MMM, and MDT stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
