Stocks fall for many reasons, but a significant percentage of falling stocks will go on to set successively lower lows as the market rejects inadequacy.
So it's a surprise to see that all three stocks in today's article – including a couple of big names – look to have reached the bottom of their fall. Not all of them offer compelling value, however:
Telstra Corporation Ltd (ASX: TLS) – last traded at $5.47, up 1.7% for the year
Since making the 52-week lows list at $5.28 earlier this week, Telstra shares have since rebounded to be up 1.7% for the year. Telstra's price took a hit recently after the ACCC announced a decision to cut Telstra's line-rental prices (the price it charges competitors to use its network) by 9.4%.
Shareholders sold the stock on the news, although it looks to be short-term pain as Telstra has many growth opportunities available to it, including a recently developed Wi-Fi system that is up to 6x faster than the government's NBN.
While I am not a buyer of Telstra shares at today's prices, I think the company is beginning to look attractive. Unfortunately, I doubt that it will fall far enough to become a screaming buy thanks to high investor interest and a fantastic dividend.
Origin Energy Ltd (ASX: ORG) – last traded at $5.60, down 61% for the year
Origin is another stock that has rebounded slightly since hitting a 52-week low of $5.38 earlier this week. After year-long disappointment and mounting concern over the company's balance sheet, Origin shares have been battered down from $10 as recently as August to today's levels.
Origin has been a chronic underperformer in recent years, although with current prices much of the risk associated with low oil/gas prices and weakening electricity demand looks to be priced in. Furthermore, despite an emergency capital raising at $4 per share (to bolster its balance sheet), Origin shares have not yet fallen any further which indicates they could have reached a price floor.
I do not believe Origin shares will fall any further in the near term.
Nearmap Ltd (ASX: NEA) – last traded at $0.345, down 36% for the year
Nearmap shares entered a swan-dive after Managing Director Simon Crowther left the company last week, compounding earlier investor concerns about lacklustre US growth. Mr Crowther's replacement, Rob Newman, has 'deep and specific expertise' relating to Nearmap, as well as a proven track record of taking Australian tech companies into the US market.
This looks to be a specific answer to worries about the company and could indicate a step up in the company's efforts to crack the US market. In the meantime I believe that investors are overlooking Nearmap's solid balance sheet and operating profits and I think the stock could return to form over the next 12 months or so.
