3 Value Stocks at 52-Week Lows – Is It Time to Buy?

Hey everyone, today we’ve got three potential value stocks that are currently selling at or near their 52-week lows. And as we know, that’s always a great place to start when looking for undervalued opportunities in the market.

Let’s dive into these stocks, analyze their numbers, and see if they’re worth adding to our portfolios.

Stock #1: Enphase Energy (ENPH) – A Solar Leader on Sale?

First up, we have Enphase Energy, a company in the solar panel business. Now, check this out:

• Stock high: December 5, 2022, Enphase was trading at a whopping $340 per share.
• Stock low: Just four months ago, it hit $58 per share.
• That’s a massive drop, and it begs the question—what happened?

The Numbers Behind the Drop

• Free Cash Flow (FCF): $450M per year over the last five years, $480M last year. That’s strong.
• Net Income: Significantly lower than free cash flow, which we actually like to see.
• Return on Capital (ROC): 22% over the last five years, but only 5% in the last year. That’s a huge drop.
• Revenue Growth:
  • 5-year compounded annual growth rate (CAGR): 16%.
  • 3-year CAGR: -1.3% (yes, negative).

Clearly, something shifted at Enphase. Revenue was growing steadily, then declined. So we dig deeper into the income statements and—boom—we see a big revenue increase in the last quarter. That’s interesting. Did they finally turn things around?

Why Enphase Could Be a Multibagger

Enphase isn’t just another solar company. They dominate the market in solar microinverters, battery storage, and energy management solutions. Some key advantages:

• 40% global market share in residential solar inverters.
• Expanding internationally into high-growth markets like Europe, Australia, and Latin America.
• Technology advantage: Their microinverters are more efficient and reliable than traditional solar inverters.
• Long-term megatrends: Solar adoption, energy storage, and smart home electrification.

This is not a dying business. In fact, analysts predict double-digit revenue growth going forward. And get this—earnings per share (EPS) is expected to grow from $3.75 this year to $9.50 by 2028. That’s almost 3x growth.

Stock Analyzer Tool Breakdown

We ran a 10-year analysis with these assumptions:

• Revenue Growth: 6%, 12%, 18%
• Profit Margins: 10%, 15%, 20%
• Free Cash Flow Margins: 20%, 25%, 30%
• Price-to-Earnings (P/E) Ratios: 15, 18, 21
• Discount rate: 9% (we always factor in a margin of safety)

Results:

• Low valuation: $17 - $33
• Middle valuation: $45 - $75
• High valuation: $105 - $158

At the current price, the expected return is 11%. The key question is:

 Is last quarter’s revenue turnaround sustainable?

If yes, Enphase could be a steal at these prices.

Stock #2: UPS – A Logistics Giant With Long-Term Strength

Next, let’s look at UPS, a household name in global shipping and logistics.

• Stock high: February 2022, UPS hit $233 per share.
• Stock low: Just weeks ago, it dropped to $109 per share.
• Market Cap: ~$100B

Key Metrics & Financials

• Strong return on capital (a sign of a moat and efficiency).
• Revenue growth: $4.33B increase despite only spending $1.6B on acquisitions—that’s great efficiency.
• Lost Amazon as a major client, but Amazon was likely a low-margin customer.

Even with this drop, UPS remains a logistics powerhouse, delivering 25M+ packages per day across 220 countries.

Growth Drivers for UPS

1. E-commerce expansion (growing at 10% CAGR)
2. Automation & AI-driven logistics
3. Electric vehicle adoption (lower operating costs)
4. Pricing power & cost management

UPS’s strategy is shifting to focus on higher-margin businesses, which is why losing Amazon might actually be a good thing.

Dividend & Free Cash Flow

• Dividend Yield: 5.5%
• Free Cash Flow: $4.4B last year, but $7B on average over the last five years.
• Dividend Payout: $5.5B – that’s a little concerning.

Stock Analyzer Tool Breakdown

We ran a 10-year analysis with these assumptions:

• Revenue Growth: 2%, 4%, 6%
• Profit Margins: 7.2%, 8.5%, 9.2%
• Free Cash Flow Margins: 6.5%, 7.5%, 8.5%
• P/E Ratios: 15, 18, 21
• Discount Rate: 9%

Results:

• Low valuation: $98 - $113
• Middle valuation: $146 - $166
• High valuation: $213 - $239

At the current price, UPS offers a 12.3% expected return, including the dividend.

Stock #3: Nike – An Iconic Brand at a Discount

Last up is Nike, a company we’ve analyzed for years.

• Stock high: $180 in 2021
• Stock low: Just last week, Nike hit $68 per share.
• Current price: ~$73 per share

Nike’s Strengths

• Gross margins: 45%—and rising due to their direct-to-consumer shift.
• Zero acquisitions – Nike grows organically.
• 8 Pillars Analysis: 7 checks, 1 X (P/FCF slightly high).

Nike dominates the global athletic footwear market, controlling 40% market share, far ahead of Adidas and Under Armour. Their brand power is insane:

• Jordan Brand alone does $6B+ in revenue per year.
• Expanding in China, their second-largest market.
• Moving towards automated manufacturing for better efficiency.

Stock Analyzer Tool Breakdown

• Revenue Growth: 3%, 5%, 7%
• Profit Margins: 10%, 11%, 12%
• P/E Ratios: 20, 23, 26

Results:

• Low valuation: $60
• Middle valuation: $85
• High valuation: $117

At today’s price, Nike offers an 11% expected return. With its premium brand and expansion into high-margin digital sales, this is a stock that could compound for years.

Final Thoughts – Are These Stocks Buys?

Each of these stocks has a story and strong long-term potential:

• Enphase: A potential solar multibagger if growth stabilizes.
• UPS: A steady dividend payer with e-commerce tailwinds.
• Nike: A global powerhouse trading at a discount.

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