Value hunting: 11 stocks making 52-week lows (and two that pass a top investor's filters)

Welcome back to another 52-week low series where we trawl through some of the market’s most discarded and disliked companies.

Market Index’s 52-week lows scan shows users which companies are making 52-week lows on the given day.

In my first article, we reviewed The 52-Week Low Formula by Luke Wiley, Senior Vice President of UBS. His five key criteria (and in that order) include:

1. Durable competitive advantage

2. Required minimum free cash flow yield (above 10-year Treasury yield)

3. Return on invested capital greater than cost of capital

4. Free cash flow to long-term debt ratio of less than three

5. Trading below historic and recent high prices, more sellers than buyers

Stocks that made 52-week lows

Note: This is the list of stocks that featured in the 52-week low article on February 6. Thinly traded stocks were excluded, performance since 52-week low uses February 6 as a reference point.

Key takeaways

Dip buying would've hurt: The average stock is down -8.4% from our reference date of February 6th. We're also in the midst of earnings season, which might be a catalyst behind the underperformance of these stocks.

Wiley's filters: There were two stocks that passed two of Wiley's filters (cashflow yields and long-term debt to cashflow): Elders and OFX Group. But they didn't perform that well either, down 6.9% and 7.1% respectively. Taking a closer look:

• Elders: The stock copped a -23% selloff after its FY22 results on 14 November flagged a cautious outlook amid adverse weather events and softening soft commodity prices. Longstanding CEO Mark Allison also announced his retirement. Still, there's a perception that agriculture remains a stable sector. Interestingly, the stock abruptly fell -5.9% on more than 500% 20-day average volumes on February 8th. This was in parallel with two investor briefings with a number of institutional investors.

• OFX: The online foreign exchange and payments company experienced a similar -17.8% fall between 24 to 30 January after a December quarter update flagged softening transactions among higher value customers. There's been no market sensitive announcements since then, and the stock has quietly drifted lower.

Broader market weakness: Coincidentally, the reference date was when the ASX 200 peaked and down -3.6% since. Perhaps the health of the broader market takes precedence over the filters, as even the best bargain bin names might struggle amid the pullback.

New stocks making 52-week lows

Wiley's filters

Among the profitable companies, only two made it through two of Wiley's filters: Required minimum free cash flow yield (greater than 10-year Treasury yield) and free cash flow to long-term debt ratio (less than 3).

That being: Santos and Regis Healthcare.

Note: The data is based on the latest full-year result