Liz Claiborne (NYSE:LIZ) is just one of more than 900 stocks currently trading at a 20-year low. Liz stock closed at $4.70 Wednesday, down significantly from its all-time high of more than $40 in 2007. By noon Friday, the stock was down to $3.85 as it continues to tumble. Anyone who is familiar with retail knows Liz is in the middle of a two-year restructuring and turnaround. While it's still too early to evaluate its success, especially with the global economy in the toilet, it does make me wonder just how far the once iconic brand can fall.
In fact, it makes me question every stock that trades on an exchange, whether in the United States or in another part of the world. According to UglyChart.com, there are more than 900 stocks in the United States trading at 22-year lows. That's not 52-week lows - that's 22-year lows! Thinking positive, I found five stocks on the list that are making money and priced to move. (Find out more about reading the market from record highs and lows at Assessing Market Behavior With The Herrick Payoff Index And New High-New Low Index.)
Carnival PLC (NYSE:CUK)
This is the entity created in 2003 when Carnival (NYSE:CCL) bought Britain's P&O Princess, operator of the Love Boat cruise ship, for $5.4 billion. As part of the takeover agreement, Carnival became a dual-listed company, trading on both the New York and London stock exchanges. It traded just under $60 in early 2006, but in late October, in reaction to slower than normal passenger traffic along with a desire to preserve capital, it suspended its dividend for 2009, an annual savings of $1.3 billion. Interestingly enough, Carnival PLC American depository shares (which closed Thursday at $19.44) trade at a 3% discount to its American counterpart Carnival Corp.
Janus Capital Group (NYSE:JNS)
Trading as high as $50 when it first went public in 2000 under the name Stilwell Financial, the Denver-based asset management company is a prime takeover candidate now that its stock is trading so low. It closed Thursday at $7.91. In late October, a JPMorgan Chase analyst raised its rating from to 'neutral' from 'underweight', citing the money manager's strong brand recognition and franchise value. With a current ratio slightly less than 4 and $2.95 in cash per share, the downside seems minimal in the long term.
MI Developments (NYSE:MIM)
MI Developments acts as the real estate arm of auto parts maker Magna International (NYSE:MGA). This stock has hit plenty of turbulence since it took flight as a spinoff in 2003. Hitting a high near $40 in 2007, it's been embroiled in shareholder activism for most of the past year and closed Thursday at $10.36. It seems David Einhorn and his Greenlight Capital, which owns 11.7%, has a problem with management's approach to its weakling sister, Magna Entertainment (Nasdaq:MECA). MI Developments owns 96% of the voting interest and 54% of the equity, and currently is keeping the money-loser afloat. I'm guessing a sensible solution is available to extricate the profitable business from the not-so-much.
Tween Brands (NYSE:TWB)
I must be a glutton for punishment picking a specialty retailer after my experience with Liz Claiborne. Nonetheless, while an analyst at Sterne Agee lowered expected earnings per share in fiscal 2008 to 75 cents from 87 cents in late September, due to lower traffic in the malls, Friedman Billings raised its rating to 'market perform' from 'underperform' just two weeks later. With its conversion of 560 Limited Too stores into the Justice brand currently under way, it should have a single-brand growth strategy in place for spring 2009. These changes should save the company a significant amount of money in the future. With nearly $2.60 a share in cash, it should be able to weather the retail storm.
AFC Enterprises (Nasdaq:AFCE)
Who doesn't like chicken - especially when it's made Louisiana style, marinating for 12 hours or more? I wrote an article about the quick-service restaurant company (the owner of Popeye's Chicken & Biscuits) back in August and little has changed to alter my opinion. It has a place in the chicken business, and with a little hard work, it could give the Colonel a run for his money. On Wednesday, management provided guidance for the full year that indicated same-store sales would drop 1%-2%, as expected, and earnings per share will be between 75-77 cents. At $4 per share, what's not to like?
Bottom Line
Just because a stock is trading at an all-time low doesn’t mean it deserves to be there. The price people are willing to pay is the price people are willing to pay. Sometimes, like a falling knife, it keeps dropping. Other times it hits bottom. Where these five are at is far from certain, but I’m confident they're close to reversing course.
For more on combining company's numbers with a look at their stock price performance, see Blending Technical And Fundamental Analysis.
