Numbers of stocks near 52-week lows is staggering

Nov 11 2008

Numbers of stocks near 52-week lows is staggering

Posted by: admin in Stocks News

Filed under: Google (GOOG), General Electric (GE), General Motors (GM), Sirius Satellite Radio (SIRI), Citigroup Inc. (C), Circuit City Stores (CC), Kellogg Co (K), DJIA, Financial Crisis

Whenever someone asks me if a stock can go lower, I reply “of course.” As investors have learned the hard way over the past few months, a company’s shares can go all the way to zero. Just ask holders of Circuit City Stores Inc. (NYSE: CC) (bankruptcy), General Motors Corp. (NYSE: GM) (near-insolvency) and Sirius XM Radio Inc. (NASDAQ: SIRI) (crushing debt load) whose shares are heading off a cliff.

The number of companies trading at or near their 52-week lows is staggering. Investors are faced with some of the biggest bargains they’ve seen in decades or the potential to get burned even further as corporate earnings deteriorate further. I’m not sure whether to dip my toe further in the market or to invest in more Mason jars that I have the ability to fill with the remnants of nest egg and bury in my backyard.

One thing is for certain, stocks are getting cheap. The challenge for investors to figure out is where the market has thrown out the baby with the bathwater. Here are some examples:

Google Inc. (NASDAQ: GOOG). The largest search engine company is trading at near a three-year low. Chief Executive Eric Schmidt has said the economy is far worse than he expected. The company traded at $307.93, near its 52-week low of $300.52. CNBC’s Jim Goldman is baffled by the market’s reaction to Google, as am I.
Citigroup Inc (NYSE: C) has had more ups and downs than Cher. Shares of the big bank last traded at $10.80, near its low of $10.34. It is down more than 63% this year. Remember, sometimes stocks are cheap for a good reason — like business is bad.
Kellogg Co. (NYSE: K) reported better-than-expected third quarter earnings and gave bullish guidance. The market, though, could have cared less. Shares of the cereal maker are trading at about $48, near their 52-week low of $45.25. They are down more than 8% this year.
General Electric Co. (NYSE: GE) has been in Wall Street’s dog house so long it should think about a long-term lease. The conglomerate trades for about $17.73. Its 52-week low is $17.27.
Saks Inc. (NYSE: SKS) already has gotten its lump of coal from investors worried about a horrid holiday season. Shares of the retailer are down more than 77% this year. The stock is trading at $4.66, near its 52-week low of $4.23.