2 FTSE 100 shares to buy now at 52-week lows

One technique often used to find potential investment deals is to screen the market for a stock trading close to the 52-week. Today, I look at it FTSE 100. Do the large-cap indexes have anything to offer after this year’s rally?

My screening identified five stocks trading at 10% of their one-year value. I have chosen two of these stocks to write about today, because I think they can both have a long-term profit to buy at the current level.

Are persimmon stocks too cheap?

House builder persimmon (LSE: PSN) was dumped by investors last week, after the company warned it was winding down and new home profits would fall this year.

However, this news did not come as a huge surprise. All that the share price has done is to break the rally that has been seen since the beginning of the year.

Home builder profits fluctuate with market conditions. Now we go down. Higher interest rates drive up mortgage costs, putting pressure on prices and reducing sales.

However, this is a cyclical business and history shows the market will stabilize and eventually recover.

The risk for investors today is that it is too soon to get involved. The economy could get worse and house prices could fall more than expected. Maybe, but my experience is that cyclical stocks always look riskiest when they are near the bottom of the cycle.

Persimmon is currently trading close to book value of 1.077p per share. More than 20% of this amount is held in cash by the end of 2022, with the remainder in property. Business seems pretty safe to me, even if things get worse for a while.

The broker estimates the share price at 10 times the forecast earnings, with an expected yield of 6%. To me, this looks like a solid contrarian buy.

Hargreaves Lansdown may be cheap

Hargreaves Lansdowne (LSE: HL) is the UK’s biggest retail investor platform, but it’s facing tough times. The stock price is down nearly 20% this year and more than 60% from its 2019 peak.

Meanwhile, founder Peter Hargreaves has been critical of CEO Chris Hill’s strategy to invest in robo-advice and other technology projects.

I’m not sure either. I think that Hargreaves should probably focus on the core business of stock dealing and fund sales first.

The group is still the dominant player in the UK, with a market share of over 40%. Customer assets under administration were worth £127bn at the end of last year.

However, competition from rivals such as Interactive Investor and AJ Bell more difficult. My guess is that Hargreaves will come under pressure this year to cut costs and offer better interest rates to customers who hold cash.

These factors may have caused Hargreaves’ profits to fall. Brokerage forecasts show earnings won’t drop until next year.

Bottom time in stocks is almost impossible. But Hargreaves shares are currently trading at a 10-year low, with a forecast price-to-earnings ratio of just 13. That’s well below the historical norm – and there’s also a 5% dividend yield.

I think this could be a good time to start building a long-term position in this market-leading business.