Diamonds in the rough: These two beaten-down stocks could be worth buying

  • The market may be notching new highs this week, but not all stocks are rising.
  • As of Tuesday midday trading, 12 stocks hit 52-week lows.
  • "This is a good opportunity to add shares of Federal Realty," Eddy Elfenbein, editor of the Crossing Wall Street blog, said of the stock that just hit its lowest level since September 2015.

The S&P 500 continues to notch new highs this week, but not all stocks are rallying.

So far this month, 32 S&P 500 components have touched 52-week lows, or a bit more than 6 percent of the index, while 130 components so far this month have touched 52-week highs. In Tuesday trading, 12 stocks hit 52-week lows, according to FactSet data.

Scanning the list of beaten-down names is a good way to find bargains, according to Eddy Elfenbein, editor of the Crossing Wall Street blog.

"A great, easy way, for new investors to go bargain-hunting is look at that list of the new lows, and that's a good way to find diamonds in the rough," Elfenbein said Monday on CNBC's "Trading Nation."

One name that stands out on the list is Federal Realty Investment Trust (FRT), which offers a dividend yield of more than 3 percent, and on Tuesday hit its lowest level since September 2015.

"This is a good opportunity to add shares of Federal Realty," Elfenbein said of the stock, which has declined more than 13 percent year to date.

For Evercore ISI's head of technical analysis, Rich Ross, AutoZone (AZO) is the way to go. On Tuesday, the auto parts company hit its lowest levels since August 2015, after declining nearly 15 percent in 2017.

Despite its pullback, Ross says the stock remains technically strong. He pointed out that shares of AutoZone have held their 50-month moving average since 2001, and have advanced from around $25 per share that year to highs of over $800 per share in 2016.

"For my money, the trend and the chart are intact. Our fundamental analysts like the stock a lot," he said. "I think that's a winning combination, to buy a great fundamental story on a compelling technical pullback."


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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