Volatility is back. The markets slumped badly at the end of last week and have rallied considerably higher thus far this week. From solid corporate earnings to tepid economic reports to deepening troubles in Europe, there's a whole lot of push and pull going on right now.
Consider this fact: The S&P 500 has fallen at least 1% on four occasions this month alone. It happened only once in March and not even once in February. That's actually good news for value investors: each sell-off has brought a fresh list of bargains, as the list of 52-week lows starts to grow larger.
This week, I've come across a handful of solid long-term businesses that have touched fresh 52-week lows in the past few trading sessions. I've been tracking these companies over the years, awaiting the moments when they temporarily fall out of favor. They're in the doghouse once again, and now look inexpensive in the context of their long-term track record.
1. Barrick Gold (NYSE: ABX)
This leading gold miner has bounced around between $45 and $55 for much of the past two years, but has recently fallen below support levels. My colleague Tim Begany wisely suggested investors dump this stock back in November, although the sell-off now looks complete. This stock is now looking a heck of a lot more appealing.
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Begany correctly noted that Barrick's costs were spiraling, but it's even worse than he thought. At the time he wrote his article, Barrick's cash cost per ounce of gold was expected to have reached an all-time high of $482 in the fourth quarter, but the figure actually climbed to $505. Adding insult, management conceded that cash costs per ounce in 2012 would rise to at least $520 and perhaps as high as $560. (The company also mines copper at about $2 a pound.)
Yet with gold trading at around $1,640, Barrick is still generating solid profits: The company is likely to earn about $5 a share this year and $6 a share in 2013, assuming stable gold prices. Costs will remain a problem, but Barrick remains on track to boost output as its key mines hit their stride, which explains the rising earnings per share (EPS).