Overseas opportunity
I can’t say I’m someone who particularly likes to push my luck in regions of the world where political upheaval can threaten my investments. One such example where I’ve bucked that trend is AngloGold Ashanti in Africa, which dealt with a large labor strike that shut down two its mines for a significant amount of time. This came on top of the higher-than-normal labor costs African metal miners already deal with. The next such name I’d like to add to this short list of exceptions is independent oil and gas driller TransGlobe Energy Corporation (USA) (NASDAQ:TGA).
It’s pretty easy to figure out why investors aren’t giving TransGlobe Energy Corporation (USA) (NASDAQ:TGA) any leeway in the earnings column — its operations are in Egypt and Yemen, two political hot spots which are known to suffer from upheavals and potential product disruptions. However, TransGlobe Energy Corporation (USA) (NASDAQ:TGA)’s track record of nine profitable years over the past 10 and $43 million in free cash flow generation last year would speak otherwise. The only real concern for TransGlobe Energy Corporation (USA) (NASDAQ:TGA) shareholders should be whether or not the company is successful in garnering new permits and if the price of oil is stable or rising. In both instances, TransGlobe Energy Corporation (USA) (NASDAQ:TGA) looks poised to succeed.
With the stock currently trading at a mere four times forward earnings and cash flow, investors seem complacent to assume that Egypt’s woes will drag down TransGlobe. At this price, I’d say most of the political risk is baked into the price of the stock and it’s worth a shot.
Foolish roundup
This week is all about rolling the dice. There are clearly reasons to be concerned with weak margins in Central Garden & Pet Co (NASDAQ:CENT)’s fertilizer operations, precipitously weak coffee prices for the iPath DJ AIG Coffee ETF, and the potential for political problems in Egypt overshadowing TransGlobe Energy Corporation (USA) (NASDAQ:TGA). However, each has a unique set of catalysts and value that make them undeniably attractive at their current levels.
The article 3 Stocks Near 52-Week Lows Worth Buying originally appeared on Fool.com and is written by Sean Williams.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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