One of the most basic yet powerful strategies in investing is to buy stocks when prices are low and sell when they rise. However, many investors avoid low-priced stocks, fearing they’ll fall even further. But when it comes to quality companies, low stock prices can actually be a great opportunity for long-term gains.
Today, three well-known companies — Alphabet (GOOG, GOOGL), Merck (MRK), and Block (NYSE: XYZ) — are trading near their 52-week lows. While they may seem risky now, these stocks could be strong long-term investments. Here’s why:
1. Alphabet: Still a Tech Giant Despite Challenges
- Stock Down 16% YTD, nearing its 52-week low of $142.66
- Concerns over antitrust issues and possible company breakup
- Currently trading at a P/E ratio of 17.8, below the S&P 500 average of 23
Despite legal and regulatory challenges, Alphabet remains a powerful business. Even if it is broken up, it could unlock more value for shareholders. The company earned $112 billion over the past 12 months and still leads in key areas like Google Search, YouTube, and AI through Gemini.
🔹 Why Buy Now? Alphabet is still innovating, still earning, and trading at a discount. It remains a solid long-term buy.
2. Merck: Pharma Facing Short-Term Tariff Worries
- Stock Down 22% this year
- Recently hit a 52-week low
- Tariff-related costs expected to be around $200 million this year
- Sales fell 2% in Q1, totaling $15.5 billion
- Low P/E ratio of 11.7
Merck is facing short-term challenges due to tariffs and concerns about future patent expirations, especially for its cancer drug Keytruda. However, it’s also investing in new treatments, including a GLP-1 weight-loss drug.
🔹 Why Buy Now? Its low valuation offers a margin of safety, and the company’s pipeline shows promise. For long-term investors, Merck could be a bargain stock right now.
3. Block: Fintech Under Pressure, But Still Growing
- Stock Down 34% this year
- Earnings fell short of expectations
- Relies heavily on Bitcoin revenue (about 40% of total)
- Incurred a $93 million Bitcoin-related loss in Q1
- Still posted 32% growth in operating profit to $329 million
- Current P/E ratio is 12, and forward P/E is under 14
Block, the parent company of Cash App and Square, has seen its stock struggle due to economic uncertainty and earnings pressure. However, it remains well-positioned to grow as the economy improves and crypto markets stabilize.
🔹 Why Buy Now? Block’s core products are still in high demand. With a low valuation and strong fundamentals, it could be a smart buy for long-term investors.
The Bottom Line: A Chance to Buy Quality Stocks at a Discount
If you’re a long-term investor, these short-term dips in Alphabet, Merck, and Block offer a unique opportunity. Each company has strong fundamentals and is trading at attractive valuations.
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