Let’s face it: bottom-picking isn’t for everyone. Investing in a stock at its lowest point with hopes of an immediate recovery sounds great, but it’s much easier said than done. You risk catching a falling knife—or worse, catching the sink too. Despite the high risks, there’s an undeniable allure to getting the best price on stocks lingering around its 52-week low. But the big question is, how do you find these stocks?
The good news is that we can screen the market for stocks with a higher chance of recovery by using various criteria, such as trading volume, proximity to their 52-week low, analyst ratings, and more. This approach increases the likelihood of identifying solid picks.
So, I’ll focus on three stocks that topped my screen list in this article. To compile this list, I screened the market using the following criteria:
- Trading price: Above $5,
- Trading range: Within 20% of its 52-week low,
- Analyst rating: “Buy” and above,
- Revenue growth: 10% year-over-year growth based on the latest quarterly report,
- Earnings growth: 10% year-over-year growth based on the latest quarterly report,
- Trading volume: 75% or more increase from its 20-day volume average.
Then, I sorted the list based on the highest volume change and chose the top three. Here’s what I got:
Madison Square Garden Sports (MSGS)
If you’re a fan of basketball and other sports, you’re likely familiar with Madison Square Garden Sports (NYSE: MSGS). The company owns various sports assets, including the NBA’s New York Knicks, the NHL’s New York Rangers, and several development leagues. MSGS also owns Knicks Gaming and holds a controlling interest in Counter Logic Gaming (CLG), a prominent esports organization. Recently, MSGS announced the appointment of Jamaal Lesane as its new Chief Operating Officer. In this role, Lesane will help oversee the company’s strategic vision and work to optimize the performance of its professional sports franchises.
Madison Square Garden Sports Corp. ended Q4 2024 on a high note. Revenue surged 79% year-over-year (YOY), from $126.9 million to $227.3 million, while earnings skyrocketed 371.79% YOY, moving from a loss of $0.39 to a profit of $1.06 per share.
According to the company’s financials, this impressive performance was driven by the successful playoff runs of the New York Rangers and New York Knicks, significantly boosting ticket sales and sponsorships.
This strong performance has attracted market attention, as evidenced by increased trading volume and a moderate buy rating from Wall Street analysts. With MSGS as one of the premier stocks still trading near its 52-week low, now may be an opportune time to consider picking up MSGS as prices continue to show signs of recovery.
Fennec Pharmaceuticals (FENC)
Fennec Pharmaceuticals (NASDAQ: FENC), a biopharmaceutical company specializing in pediatric oncology, is renowned for its FDA-approved lead product, Pedmark. This treatment helps prevent cisplatin-induced hearing loss in children suffering from ototoxicity. The company recently announced the appointment of Jeffrey S. Hackman as its new director and chief executive officer. Hackman will oversee Fennec’s strategic direction and the expansion of Pedmark use within the oncology community.
Fennec Pharmaceuticals reported outstanding results for Q1 2024, with revenue soaring 304.34% year-over-year from $1.68 million to $25.38 million. Earnings also surged 1,413.24% YOY, rising from a loss of $0.23 per share to a profit of $0.47 per share. The company attributed its revenue growth to a licensing agreement with Norgine, which has enabled the commercialization of PEDMARQSI in New Zealand, Australia, and Europe. Additionally, Fennec’s PEDMARK received an amended permanent J-code, potentially boosting its market position.
Wall Street has noticed, as reflected in the consensus strong buy rating. With significant financial improvements, anticipated royalties from the Norgine deal, and robust trading volume near its 52-week low, FENC is a stock worth watching.
iRhythm Technologies (IRTC)
iRhythm Technologies (NASDAQ: IRTC) is a digital healthcare company renowned for its wearable sensors and cardiac monitoring services. The company provides health solutions to detect and prevent diseases, primarily through its Zio Systems, which monitors irregular heart rhythms in patients. The Zio System is available in three categories:
- Zio XT
- Zio AT
- Zio Monitor
The company recently announced a significant milestone: the initiation of its manufacturing automation phase. This advancement will enable iRhythm to produce its Zio systems more efficiently, allowing for broader distribution at a lower cost to customers worldwide.
While the company recently hit a 52-week low, this presents an opportunity for investors willing to take a calculated risk. According to its latest quarterly financials, iRhythm Technologies reported a 19.3% year-over-year revenue increase, driven by strong demand for its Zio products. The company has also raised its guidance for FY2024, anticipating revenue growth of 18% to 20% YOY. Additionally, iRhythm announced plans to expand into the European and Japanese markets, underscoring its confidence in continued growth.
Wall Street analysts recognize IRTC’s potential and give it a strong buy rating, further validating its recovery potential. For investors seeking stocks with robust financials and substantial trading volume at attractive price levels, IRTC is worth keeping on your radar.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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