With a record closing price on Thursday, it exceeded 4000 for the first time. However, so far, not all stocks can share these gains.
Although most of the S&P 500 stocks have been on the rise this year, about one-fifth of the stocks have fallen in the first quarter of 2021. Some declines are due to root causes, while others seem to be plagued by the market’s shift of momentum from growth stocks to cyclical stocks. The value name.
However, once the headwinds weaken, those forgotten names may catch up as its profit forecast remains strong. In some cases, analysts adjusted higher expectations this year. This provides a good opportunity to snap up stocks of basically stable companies at discounted prices.
So far, among the nearly 100 S&P 500 companies in the negative region, about half are expected to release earnings per share in 2021, which is at least 20% higher than earnings in fiscal 2019. Among them, this force is expected to continue until 2022, which means that their income in 2022 will increase by at least 10% more than the level in 2021.
To find stocks whose earnings potential may not be reflected in the stock price, Barron These 30 names were taken, and all stocks whose trading prices exceeded 30 times the expected return in 2021 were deleted. That left us with nine names.
Even better, since the end of last year, analysts have raised their 2021 and 2022 earnings expectations for all stocks, which means that Wall Street is more bullish on them. Most of these discounted names are growth stocks in the medical, technology, telecommunications and consumer sectors.
Note: EPS in 2021 and 2022 are consensus estimates.
For example, the symbol: QCOM’s stock has fallen nearly 10% so far this year. Investors seem to have no impression of the company’s revenue in the first quarter. The company’s revenue in the first quarter increased by 62% over the same period last year, but it still did not meet analyst expectations. In the long run, the company is known for the chips that power smartphone processors and can benefit from the global transition to 5G networks and the infrastructure spending proposed by the Biden administration.
(VTRX) share is another example where the recent pullback due to negative events may have gone too far. In mid-October, due to disappointing test results, the biotech company cancelled the development of a once-promising drug. Since then, its share price has fallen by 23% and has fallen 10% so far this year. Although the drug failed, Barron Vertex wrote in March that Vertex is still the center of cystic fibrosis treatment and is developing a promising pipeline.
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