4 Stocks Trading at 52 Week LOWS....Time to BUY?

Some of the best investments you'll ever make won't feel comfortable. In fact, they'll often feel scary. Why? Because great opportunities frequently appear when sentiment is at its worst. In today's video, we're going to be looking at four stocks that are trading near their 52- week lows. The question isn't whether they've fallen. The question is, has the market created an opportunity? Or is the market warning us about something bigger to come? Let's dive into each of these names and find out. One of the biggest mistakes investors make is assuming that every stock trading near a 52- week low is a bargain. That's simply not true. Sometimes stocks hit new lows because of the business deteriorating. Oftentimes, the market overreacts to short-term concerns. Stocks can see their stock price fall and not necessarily be a bargain, but rather a stock that's cheap for a reason. Those are not the investments we are looking for. We want stocks that have fallen in the short term, but the overall business is still intact and not in fact broken. So, with that being said, the four stocks we're going to be taking a closer look at today will be Mastercard, Uber Technologies, Chipotle, and New Holdings. Let's start with one of the highest quality businesses in the world. That's Mastercard, stock ticker MA. Mastercard is one of those companies that many investors wish they had bought years ago. The business has incredible characteristics. A global network effect, strong margins, asset light model, tremendous cash flows, and strong dividend growth. Every year, we see more and more move towards digital payments. Go to a sporting event, a concert. Many are digital payment only. That's a powerful long-term tailwind for a company like Mastercard. The company currently has a market cap of 434 billion, but over the past 12 months, shares are down 17%, badly underperforming the S&P 500, which is up roughly 25% over that same 12-month period. So, why is the stock under pressure, you ask? Investors are worried about consumer spending slowing, economic growth slowing, and political pressures on payments networks. Some investors also worry that AI agents or stable coins, account-to-account payments, open banking could eventually reduce the importance of traditional card networks. But here's the question I ask. Has the long-term thesis changed. Personally, I don't think it has. The world continues moving away from cash and Mastercard remains one of the biggest beneficiaries. The fact is that Visa and Mastercard along with American Express, you could throw in operate a global toll road. Every time someone swipes a credit card, a debit card, a digital wallet, Mastercard gets paid a fee and the network is enormous. Looking at this chart here, you can see the transaction volume which has now reached a new record of 10.9 trillion and that's growing. This is a business that continues to grow revenues, operating profits, and expanding operating margins at a high of 58% which is extremely healthy. Here's a look at the company's free cash flow, which also continues to grow and sits at a record 17.8 billion. Revenues growing, operating profits growing, efficiency, free cash flow. On paper, the business still looks fantastic. Now, let's take a look at valuation. And regardless of the metric you look at, we are seeing some of the lowest valuations we have seen ever when it comes to Mastercard. So, you have to ask yourself, has anything you've been seeing really changed or showing that this is in fact a dying company? I would say no. Earnings are growing at the same rate they did the past few years. Analysts rate this stock a strong buy with an average 12-month price target of $637 per share, implying over 30% upside from current levels. And I agree and myself rate the stock a buy. It's not currently in my portfolio because I do own Visa, a good chunk of it, but I may need to add some at these levels when it comes to Mastercard. And if you want to see my entire portfolio, get trade alerts anytime I buy or sell a position, then join my investing community, the Stock Investors Edge. You will also get access to our brand new valuation website we built along with our sentiment report listing a number of stocks we cover and much more. Check out the link in the pin comment down below. Now, let's move on to stock number two, which is going to be Uber Technologies. Stock ticker Uber. Now, I know Mastercard is a stock not in my portfolio, but Uber is in fact in my portfolio already, and a company that has come a long ways from its early years. This is no longer just a growth at all cost story. Today, we're seeing improving profitability, growing free cash flow, and an expanding ecosystem. Uber has become deeply embedded into daily life. Ride sharing, food delivery, business transportation. The platform continues growing. Now, let's take a look at the concerns which to me are seemingly always overblown for the most part. Competition is one. Uber is in a league of their own when compared to that of Lyft. But the growing competition is robo taxis. Those are undoubtedly, but again, like many different sectors, there can always be more than one winner. For starters, there are going to be a number of customers that seemingly don't want to ride in a robo taxi, but at the same time, Uber is investing in robo taxi partnerships themselves and technology. So, it's not like they will be left out, and that's what investors are in fact missing. Other concerns include a slowing economy and slowing consumer spending. Both valid concerns. Uber shares currently have a market cap of 144 billion and shares over the past 12 months are down 16%. But I think many investors are underestimating how powerful Uber's network has in fact become. The more users they attract, the stronger the platform gets. That's difficult to replicate. Here's a look at the climb in gross bookings over the years, sitting at an all-time high, crossing over 200 billion on an annual basis. Looking here at financials, revenues are climbing to record highs. Operating profits record highs. Operating margins record highs. As investors, that's what we love to see. Not just a company growing its top line, but doing it while becoming more efficient. And here's a look at free cash flow, which is on the verge of crossing over $10 billion. And valuations, well, they're at their lowest levels we have seen. Looking here at both forward PE as well as EV to IBIDA, a disconnect between improving financials and a falling valuation. That sounds like opportunity. Analysts rate the stock a strong buy with an average 12-month price target of $105 per share implying 50% upside from current levels. Again, a stock that I agree with. I rate it a buy and it is already a stock inside my portfolio and one I may add to in the very near future. And before we move on to stock number three, let me thank today's video sponsor, which is the Mly Fool. The Mly Fool has a ton of great resources and products available for investors of all different levels. And right now, if you go to fool.com/mark, you can check out their 10 best stocks to buy right now, completely free. Now, let's move on to stock number three, which is going to be Chipotle Mexican Grill, stock ticker CMG. Chipotle may be one of the most impressive restaurant growth stories of the past decade. The company has consistently demonstrated pricing power, operational excellence, and brand strength. Yet, the stock has pulled back significantly. Why? I feel like I'm doing my part as my family loves to eat at Chipotle. However, investors are in fact worried about consumer spending, valuation, and growth expectations moving forward. But here's what matters. People still love the product. Store expansion opportunities remain and digital sales remain a strong growth driver. The question isn't whether Chipotle is a good business. The question is whether the market has become too pessimistic about the near-term growth. When it comes to Chipotle, they currently have a market cap of $ 38 billion, but over the past 12 months, shares are down 40%. Looking here at the financial results, we can see the company has record revenues, but these types of companies, we want to take that with a grain of salt because opening more stores will obviously generate higher revenues until it can't. But it's the dip in operating margins that is a bit concerning for me. The new management team has plans to scale to 7,000 locations in the US and Canada, and approximately 80% of those are going to be drive-throughs or Chipotle lanes as they like to coin them. Right now, as you can see, the company has nearly 4,100 locations total. So, the expansion is still quite robust and has a ways to go. This is a stock that historically has traded at a premium in terms of earnings with a 5-year average PE of 45 times. Yet today, you can pick up shares at a forward PE multiple of just 21 times on 19% growth expected next year, getting closer to that pivotal PEG ratio of one that I love to see. Analysts currently rate the stock a strong buy with an average 12-month price target of $43 per share, implying more than 45% upside from current levels. For me, I tend to shy away from retailers and restaurants. It's just not something I get all that excited about to invest in given how cyclical they can be and how quickly they can go out of favor. Although I think this company has nice upside. I do love the product. It's not a stock I will be buying. But I may position myself with some option plays. And again, if you want to see all of my option plays, when I'm in, when I'm out, make sure you join my investing community, the stock investors edge, and get all my option alerts. See the pin comment down below. Now let's move on to stock number four which is going to be new holding stock ticker NU and when it comes to new this may be the highest risk highest upside stock on today's list. The company continues transforming banking across the Latin America region. What makes new interesting is the scale opportunity. Millions of consumers are entering the financial system. And looking here, you can see the growth in just the total number of customers over the last few years, which has now reached 135 million and new continues growing customers deposits products engagement. And the concerns are obvious though. Financial stocks can be volatile as they can be dependent on interest rates, economic strength, and of course the strength of the consumer and businesses. Economic conditions matter. Execution matters as well. But the long-term runway remains enormous. New has a market cap of 58 billion and over the past 12 months, shares are essentially flat. This is one of those companies where if management executes successfully, the business could be dramatically larger a decade from now. And speaking of management, the company just appointed a new CFO in the month of June. And shortly after, they announced a new $1 billion share repurchase program. This is one of two ways in which companies can return money back to shareholders. The other of course being paying a dividend, but new does not issue a dividend. New continues to generate strong revenue growth at 40% and reaching 12.5 billion in topline sales over the past 12 months. The biggest concern is very similar to what I often talk about when it comes to SoFi, and that is credit risk. And right now, in all of the data I've looked at in their past earnings results, the credit risk looks normal. not low but also not elevated by any means. Now, as that always will be changing and it's something when investing in financial stocks, you need to monitor the economy and credit risk very closely. But when you look here in terms of valuation, there's a lot of risk that seems baked into the stock that currently trades at a forward PE multiple of just 11 times with earnings growth expected of 41% this year and 32% next year. Still very strong numbers. And when it comes to analysts, they rate the stock a moderate buy with an average 12-month price target of nearly $17 per share, implying over 40% upside from current levels. Now, for me, I have to tell you, this is a name that's very intriguing. I don't want too much exposure though to Latin America as I'm already building a position in Marcato Libre, stock ticker Mi, which I like very much. But again, I may look at some option plays here. So, should investors buy simply because a stock is trading at 52- week lows? Absolutely not. Price alone tells you nothing. The real question is, has the business deteriorated or is the sentiment deteriorated? That's a huge difference because some of the best investments happen when sentiment falls much faster than fundamentals. And if I were ranking these four based purely on business quality, first would be Mastercard, second Uber, third Chipotle, and fourth new. Now, if I were ranking them based on potential upside, it would look a little different. At the top would be new, then Uber, then Chipotle, followed by Mastercard. That's what makes investing so interesting. The highest quality company isn't always the stock with the highest upside, and the highest upside opportunity isn't always the safest investment. So, with that being said, check out the pin comment below and join my investing community. And show your appreciation by smashing that like button down below. And third, comment below which of these four stocks you would rate a buy. Thanks again so much for watching and we'll see you in the next one. Take care. [music] >> [music]