Only 3 FTSE 100 stocks are near their 52-week lows right now

FTSE 100

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This morning (May 13th), I searched through the FTSE 100 index to find stocks that were below their yearly lows by up to 5%. Surprisingly, only three stocks met this criterion.

In this article, I will examine two stocks from the three mentioned. Is it wise for investors to purchase these lesser-known stocks while the Footsie is reaching record highs?

Value Investing Chance?

When I checked my screen, the initial stock that appeared was the huge telecommunications company, BT Group (LSE:BT.A). It was only a small 4.3% below its lowest price in the past year.

This company's stocks have been performing poorly lately, which was quite predictable. The telecommunications corporation has not been able to increase its revenue much lately and has also had to face high costs of building out its network.

At the same time, it has accumulated a great amount of debt (approximately £20bn), which is not advantageous in a scenario where interest rates are higher.

Because there isn't enough growth and too much debt, I wouldn't choose to invest in this particular stock. Instead, I like to put my money into companies that demonstrate strong growth and quality.

Nonetheless, as a committed investor who prioritizes value, this stock might catch my attention.

At the moment, its P/E ratio is based on future expectations and is only 5.6, which is significantly lower than the market.

At present, the dividend yield is roughly 7.5%. This suggests that while waiting for a potential resurgence in the stock's value, there's a possibility of payment.

It's important to understand that there's no certainty the company will provide dividends or witness an improvement in their stock price. In the future, the high amount of debt the company owes could add strain to both of these factors, specifically if interest rates continue to be or become even higher.

When viewing the stock from a perspective of value investing, I believe that it appears to be intriguing.

On my computer screen, I looked at the second company's stocks, which belonged to Whitbread. This business owns Premier Inn. Right now, their stocks are only down 2.9% from the lowest point they reached in the last year.

This is a share that might entice me to make a purchase. It matches my investment plan more fittingly.

To begin with, the enterprise is experiencing a steady increase in progress. In the time frame of 12 months that finished on 29 February 2024, the earnings reached a sum of £2.96bn, showcasing an impressive 13% surge in comparison to the previous year.

Furthermore, it's highly lucrative. Premier Inn UK generated a return on capital employed of 15.5% in the previous fiscal year.

One more reason why I am fond of this stock is due to its fast-growing dividends. The company has boosted its payout by an impressive 26% lately, resulting in a current yield of 3.2%.

In view of the fact that the company's stock is traded on a P/E ratio of 14 and has a free cash flow yield of 6%, I reckon it is quite attractive.

In my opinion, the most significant danger is for consumers with lower incomes. Nowadays, many of them are experiencing a shortage of available money due to the economic situation.

In my opinion, the primary cause of the recent poor performance of the shares is the level of risk involved.

I have doubts that the corporation would have raised its dividend by 26% if it was genuinely concerned about consumer spending.

In my opinion, the decline in the value of shares presents a chance for investment.

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