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FTSE 100 Index hospitality company White bread (LSE:WTB) saw its share price fall to a 52-week low of 2,723p on 5 August.
As I write this, it has edged back up a bit to 2,810p, but that is still a 23% drop so far this year, roughly the same as the drop over the past five years.
The reasons for this decline seem pretty clear: a pandemic followed by runaway inflation can make hotels, restaurants and leisure establishments much less attractive to people with less money in their pockets.
Cheap stocks?
However, I'm not the only one who thinks the shares now look cheap. The company, which owns Premier Inn, thinks so too. It has been on a share buyback spree for much of the year.
The latest update in June showed little change in the UK, but sales in Germany were growing again. And CEO Dominic Paul even talked about increasing the company's number of rooms in the UK by 3,500.
Analysts expect pretax profits to grow more than 40% between 2024 and 2027. And that could push the price-to-earnings (P/E) ratio below 11 by then.
Uncertain outlook
With uncertainties surrounding the leisure business, that could make the stock look fully valued at the moment. Net debt, at £298m at the end of last year, could also be reduced.
And I could see some volatility going forward as it may be difficult to regain investor sentiment behind a stock like this.
But with Whitbread's share price so depressed now, I think it should be a stock to consider for long-term value investors.
Back to growth
My next choice, Spirax-Sarco Engineering (LSE:SPX), hit its 52-week low on the same day I write this, August 20. At 7340p, that represents a 30% drop so far in 2024.
The name is not exactly easy to pronounce, but the company is big in the pumps, industrial control systems and a range of similar equipment sectors.
And since the pandemic, we've seen what was once a favorite growth stock go a bit off the rails.
This is another case where forecasts show that profits will grow again. In this case, analysts expect pre-tax profits to increase by 40% between 2023 and 2026.
High rating?
I think Spirax-Sarco has been valued too high in the past and its growth premium was perhaps a bit overheated.
And for now, I still say that it is by no means a cheap price, especially considering that the price-earnings ratio, although falling, could be around 23 percent in the 2026 forecasts.
So, it's not on my list of options to buy right now, but it's one I want to keep an eye on for the long term and I think there could be some good buying opportunities in the not too distant future.
Other low points
I'm surprised to see Reckitt Benckiser Not far above the 52-week low it hit in July. As of this writing, it is down 22% year-to-date and 31% over five years.
We are looking at a forecast P/E of 12-14 over the next few years, close to the long-term average of the FTSE 100.
For a company that operates in such a large consumer brand market, I think it is worth exploring this topic in more depth, but that is for another day.
