52-Week Low
What it is:
The 52-week low refers to the lowest market price of a security over a 52-week (one year) time span.
How it works (Example):
If you observe the market prices for a given security during a specific period of time, there will be a price that is lower than all others. The 52-week low for the price of any actively traded security expresses the minimum price over the course of the previous year (i.e. 52 weeks).
To illustrate, suppose you are looking at changes in the market price for company XYZ's common stock over the previous year. You find that XYZ's common stock traded at $150 exactly one year ago and at $200 today. However, at one point during that time span, the stock traded at only $125. The stock never traded at a lower price before this point nor after this point. Therefore, $125 is the stock's 52-week low.
Why it Matters:
The 52-week low serves as an indicator for potential investors. Investor's will often determine the 52-week low for a stock when looking at its current price. If the price is near or approaching the 52-week low, they might consider it a good time to buy because the stock could be undervalued.
