Morrison (LSE: MRW) and FirstGroup (LSE: FGP) are in the doldrums.
With the FTSE 100 (UKX) trading at 5,903 this afternoon, just 8 points down on the day, there's little chance the index is going to be seen anywhere near its 52-week low of 5,075 any time soon. In fact, the FTSE is only a little short of its year high of 5,989.
But the same cannot be said about some companies from the various FTSE indices. But among depressed shares, bargains are often found. Here are three names currently plumbing the depths and hitting fresh lows, which you might consider to be too cheap:
Morrison
You might be surprised to hear it, but Wm Morrison Supermarkets (LSE: MRW) is trading close to its 52-week low. The shares hit their lowest point of 261p in June before recovering, but they have slid back again and went as low as 267p on Tuesday before pulling up a little. We know that Tesco (LSE: TSCO) is still depressed from its poor Christmas season, but why is Morrison struggling?
It's hard to say, as the City is forecasting a rise in earnings per share for the full year to January 2013, with a near 4.5% dividend on the cards rising to 4.8% for the following year. If that doesn't make a forward price to earnings (P/E) ratio of 10 look cheap, I don't know what does.
FirstGroup
We know what has hit FirstGroup (LSE: FGP) of late -- the cancellation of its new West Coast Main Line contract after the bidding process was scrapped. The shares have been trading very close to their 52-week low of 184p this week, though they're up a bit at 190p today. Is the depressed price fair, or are the shares oversold?
Well, the company must be worth at least what it was before the rail franchise fiasco, mustn't it? Current forecasts put the shares on a prospective P/E of only 6.3, with a massive 13% dividend yield forecast for the year to March 2013. However, that payment would barely be covered by earnings and there must be a good chance the forecasts are optimistic. Still, with a valuation so low, there is room for a significant dividend cut and the income yield remaining attractive.
Volex
Meanwhile, looking at the small-cap end of the market, Volex (LSE: VLX) is having a dreadful time. The maker of connectors, wiring assemblies and related products saw its shares fall off a cliff in September when the firm issued a profit warning due to an unexpected fall in demand from one of its biggest customers.
Since then the shares have fallen further, reaching a new 163p low today. So what is the future looking like? Well, with ongoing fears that we might not have heard the worst, the firm's forward P/E rating of 7.6 is perhaps understandable. But there's still a very well covered, if modest, dividend of 2.5% expected.
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> Alan Oscroft does not own any shares mentioned in this article.
