Should you buy these two stocks trading at 52-week lows?

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Topps Tiles

The 52-week low bargain bin is usually full of interesting potential investments. Plenty of research has shown that buying out-of-favour stocks can yield some impressive results over the long term, and the 52-week low bargain bin is a great place to start looking for these diamonds in the rough.

However, after the recent market rally, which has affected almost every stock trading on London's main market (excluding AIM), there are only five stocks currently trading at, or close to 52-week lows according to data from Morningstar.

Cheap and cheerful 

Topps Tiles(LSE: TPT) is one of the five most unloved stocks in London today. Shares in Topps are down by 50% year-to-date despite the fact that the group recently issued a relatively upbeat trading statement. 

At the beginning of October, Topps reported that it expects to report a rise in revenue and profit for its full year ended October 1. Management expects like-for-like revenue to be up 4.2% against the prior year while adjusted pre-tax profit is expected to be in line with market expectations and new products seem to be selling well. 

The one negative in the report was the revelation that company trading performance deteriorated in the months after the Brexit vote. For the trading quarter ending October 1, revenue growth slowed to 1.4%, compared to 5.2% recorded for the same period a year earlier.

Still, the company looks cheap compared to City expectations for growth this year and next year. Earnings per share growth of 10% is expected for the company's financial year ending October 1 and growth of 4% is expected for the year after. Earnings per share of 9p are pencilled-in for the fiscal year just ended, with earnings of 9.3p per share predicted for next year. 

Based on these estimates the company is trading at a forward P/E of 8.7. As well as the company's attractive valuation, shares in Topps also support a dividend yield of 4.3% at current prices. This is one bargain stock that could be worth a closer look.

Shipping troubles 

One of Topps' comrades in the bargain bin is Braemar Shipping Services (LSE: BMS). Shares in Braemar have plunged by nearly a third this year and are closing in on a five-year low as the company struggles with hostile conditions in the shipping industry. 

For the first six months of the company's financial year, pre-tax profits collapsed to £150,000, down from £5.2m a year prior. Revenue dropped 12% to £70.2m. For the full year, management expects results to be "materially lower" than the prior year, with softer activity levels and freight rates amid a "marked slowdown" in the tanker segment dragging on its shipbroking revenue. 

City analysts are predicting a 38% decline in the company's earnings per share for the year ending February 2017 but expect earnings to rebound 24% next year to 26.7p per share. Based on these estimates, the company is trading at a forward P/E of 14.3, which looks expensive. 

Braemar's one redeeming feature is the company's dividend yield, which currently stands at 8.1%, although considering the dividend payout won't be covered by earnings per share this year, I wouldn't bet on this yield for the long term. Based on Braemar's falling earnings and unsustainable dividend, the shares appear to deserve to trade at a 52-week low.

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.