The 52 week low stock price is a valuable bit of information if you understand how to use it.
When researching a specific security, one of the first nuggets of information you will likely come across is the 52 week high/low indicator. Just as the name implies, the 52 week low is the bottom price the stock has traded at during the past 52 weeks.
Use the 52 week low indicator as follows:
- Establish an initial indicator of value. Is the stock below the intrinsic value? Why?
- Compare to year-over-year results to measure overall value, growth and other metrics.
- Track seasonal fluctuations in the stock or industry (to use as an industry measure, obtain 52 week lows for multiple stocks in the same industry).
- Forecast seasonal fluctuations in the industry.
- Remember, when a stock makes a new 52 week low, it is typically considered a bearish sign indicating an unhealthy stock that will probably trade even lower. It represents a possible shorting opportunity.