Some investors must surely be getting excited at the prospect of buying beaten-up stocks following the retracement in the S&P/ASX 200 (INDEXASX: XJO).
Two sectors of the market which have experienced their fair share of price falls are the retail and media sectors, with a number of high profile companies pummelled by investor selling.
The Retailers
Amongst retail stocks that have been sold down, two stand-outs are Myer Holdings Ltd (ASX: MYR) and Kathmandu Holdings Ltd (ASX: KMD). Both have just hit new 52-week lows. Just six months ago Kathmandu was trading around 25% higher than it is today, meanwhile Myer is down almost as much (22%) in the last six months.
Arguably these price declines have sent Myer and Kathmandu into buy territory. Based on Morningstar's data Myer is trading on a forward price-to-earnings (PE) ratio of 11.8x and a dividend yield of 7.8%. Kathmandu's metrics are also appealing – given its greater earnings growth potential – with a forecast PE and yield of 13.4x and 3.9%.
The Media players
Likewise Southern Cross Media Group Ltd (ASX: SXL) and Ten Network Holdings Limited (ASX: TEN) are both also at new 52-week lows. Radio and regional television broadcaster Southern Cross has seen its share price slump 28% in six months, while Ten Network's share price has continued its downward trend, losing a further 16%.
Although there are structural issues facing these two media companies which does make forecasting difficult, their share prices may currently reflect these concerns. Southern Cross is trading on a forecast PE and yield of 8.8x and 7.2% which looks somewhat compelling. Ten Network's metrics are clouded by expected losses, but talk of corporate activity could see the market reappraise its long-term value.
