Good Quality Stocks Near 52-Week Lows; Should You Buy?

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Markets have been rallying in the last few months, and are rallying to new peaks. At 33,800 points on the Sensex, the markets are not cheap by any stretch of imagination. However, there are many stocks that are near 52-week lows. Here are a few that could be worthy picks at these levels. 

Lovable Lingerie

Lovable Lingerie makes innerwear for women and is a renowned brand. Last year the company expanded its capacity and commissioned a new plant in Guwahati.

The innerwear industry is expected to grow at a rate of 13 per cent, which is why Lovable has expanded its capacity. Along with this the company has also developed an E-commerce strategy as emerging and fast growing channel. The Company ventured into the E-commerce channel through "LOVZme.com" for distributing directly to the consumer. The company has also tied-up with other channel partners to boost sales and revenues. All these are likely to fructify in the next few years.

Loveable Lingerie: Better performance expected in the coming quarters

Lovable Lingerie did not have a great quarter for the period ending Sept 30, 2017. Net profits at the company fell from Rs 6.21 crores to Rs 3.20 crores. The Earnings Per Share of the company slumped to Rs 1.91.

However, going forward we believe that the various initiatives that Lovable has taken towards cost reduction, expansion and engaging through e-channel partners, should see revenues increasing and a boost to profitability.

The company could see an EPS of Rs 15 at the very least in 2018-19. If one discounts the same by 20 times, the stock should quote at Rs 300. 

The share of Lovable Lingerie are very close to the 52 week low of Rs 211. Check stock quote of Lovable here

SBI Life Insurance

SBI Life Insurance recently came-up with an IPO at a price of Rs 700. The shares are now trading at 709, which is almost the same as the IPO price.

The company is a joint venture between SBI and BNP Paribas. At the time of the public issue, many brokerages had placed a buy call on the stock. 

At the current price the stock is still trading at a very high p/e of almost 55 times.  However, the heavy discounting is largely on the back of the strong potential in the insurance business.

SBI Life: Buy on dips

While the p/e ratio is still high for the company, at Rs 709, the company is trading at P/EV multiple of 3.8 times, which is reasonable.

The stock can be bought on declines only, as valuations continue to remain lofty. However, it also has more to do with the current market scenario, where valuations for most stock prices are high.

Check stock quote of SBI Life here

Tata Motors

Shares of Tata Motors have plunged to Rs 368, which is very close to its 52-week low of Rs 358. Largely, the fall has been on account of numbers that lagged estimates.

Net profit for the quarter ending December 31, 2017 rose to Rs 1,198.6 crore. The net profit for the company was largely below estimates on account of below than expected sales from the Jaguar Landrover in key markets. However, what was encouraging was the solid recovery in the domestic business. Volumes and sales, both surged as there was a strong recovery in every segment including commercial vehicles.

Check stock quote of Tata Motors here

New launches to drive growth

However, new launches especially from Jaguar Landrover will drive growth in the coming quarters. In fact, a stronger fourth quarter is likely to be driven by new models, seasonality and improved profitability. Jaguar Landrover is also expected to launch its first electric car, the Jaguar I-Pace and Range Rover plug-in hybrid later this year.

What is also encouraging is the fact that there is a robust recovery in markets like the US and China, which are key markets for the company. This could propel sales of Tata Motors' JLR brand in the coming quarters. This is a good stock to buy at 52-week low levels.

Disclaimer

The article is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author  do not accept culpability for losses and/or damages arising based on information in this article.

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