These stocks are in bear-market territory, but Wall Street expects
This looks like another good year for the stock market — the benchmark S&P 500 is up 16%. But it turns out that scores of stocks are in bear-market territory. And among that beaten-down group, there are many stocks that Wall Street analysts expect to roar back.
A list of those stocks is below.
The power of index weighting
The S&P 500
SPX,
is having an excellent year, in part, because it is weighted by market capitalization. It turns out that among the 500 stocks, 96 are down this year and 99 are down at least 20% from their 52-week highs.
Now let’s look at the top five companies held by the SPDR S&P 500 ETF Trust
SPY,
which tracks the S&P 500. Together, they make up nearly 23% of the ETF’s portfolio and the S&P 500 Index:
Beloved stocks in bear markets
To broaden a list of large-cap stocks, the following screen began with the S&P 500 and the components of the Nasdaq-100 Index, which is made up of the 100 largest Nasdaq-listed companies by market capitalization. After removing duplicates, this left a list of 523 stocks.
Among the 523 stocks, 107 are in a bear market — that is, they were down at least 20% from their 52-week highs through Sept. 21, according to data provided by FactSet.
Among the 107, there are 35 with “buy” or equivalent ratings from at least two-thirds of analysts polled by FactSet. Here they are, sorted by the 12-month upside potential implied by the consensus price targets:
| Company | Decline from 52-week high | Closing Price – Sept. 21 | 52-week high | Date of 52-week high | Share “buy” ratings | Consensus price target | Implied 12-month upside potential |
|
Western Digital Corp. WDC, |
-29.1% | $55.47 | $78.19 | 06/04/2021 | 70% | $93.39 | 68% |
|
Baidu Inc. ADR Class A BIDU, |
-55.8% | $156.71 | $354.82 | 02/22/2021 | 86% | $258.24 | 65% |
|
Micron Technology Inc. MU, |
-25.6% | $72.14 | $96.96 | 04/12/2021 | 88% | $114.03 | 58% |
|
Activision Blizzard Inc. ATVI, |
-30.1% | $73.03 | $104.53 | 02/16/2021 | 94% | $115.34 | 58% |
|
NetEase Inc. ADR NTES, |
-40.5% | $79.95 | $134.33 | 02/11/2021 | 94% | $125.11 | 56% |
| News Corp…. |
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