3 shares in the 'buy zone' and 1 to avoid

Contango Microcap Ltd (ASX:CTN), Platinum Asset Management Limited (ASX:PTM) and Village Roadshow Ltd (ASX:VRL) could all be worth considering, but you should probably steer clear of Virgin Australia Holdings Ltd (ASX:VAH).

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The ways of finding shares worthy of further investigation are wide and varied.

One place I like to look for potential opportunities is amongst stocks which are trading near their 52-week lows.

That's certainly not to say that just because a stock has been declining and is trading at a 12-month low that it's cheap. In fact, more often than not the stock is probably in the midst of an earnings downgrade cycle and should be avoided. However from time-to-time it represents an interesting opportunity that deserves closer analysis.

Here are four stocks which are all trading near their one-year lows.

Three of them look appealing on valuation grounds and arguably could now have entered the 'buy zone'.

Meanwhile, the other one appears to face significant business challenges which potentially aren't fully priced into the share price yet and hence the stock is probably best avoided.

Contango Microcap Ltd (ASX: CTN) is a listed investment company (LIC) which, as its name suggests, is focussed on smaller ASX-listed stocks. With a long-term track record, Contango offers investors an easy way to gain exposure to a professionally manged, diversified portfolio of small companies with above-average growth potential.

Platinum Asset Management Limited (ASX: PTM) is one of Australia's pre-eminent fund managers with a focus on investing internationally. The stock is down from a 52-week high of $8.34 to currently trade at $6.19, which is within 8% of its yearly low.

Village Roadshow Ltd (ASX: VRL) offers investors exposure to a range of leisure and entertainment assets including the Wet'n'Wild theme park in Sydney. The stock has slumped from around $7.70 to just over $5 since the beginning of 2016.

Virgin Australia Holdings Ltd's (ASX: VAH) share price has slumped from a high of 50 cents to a 52-week low of 27 cents. Today the shares are trading at 28.5 cents. Despite the "cheapness" of the share price, arguably Virgin remains a stock to avoid given the historically poor performance of the group.

Motley Fool contributor Tim McArthur has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »