The S&P 500 has been trading within 10% of its all-time high price, which means most investors and stocks could be doing great by following the overall market trend. However, that’s not the case today, as some names have significantly fallen behind the broader market. While some might dismiss these stocks as underperformers, others will see them as opportunities.
To start filtering for stocks that could pose a potential opportunity in the future, investors should look for bearish price action, particularly relative to a stock’s 52-week high. Wall Street defines a bear market as a 20% or more selloff from recent highs, so naturally, any stock trading below 80% of its 52-week high could qualify for this list, considering that fundamentals still reflect a healthy and strong business.
Meeting these qualifications and filters, three stocks stand out for investors to consider in the coming quarters. First is the basic materials Chilean miner Sociedad Quimica y Minera de Chile (NYSE: SQM) as a lithium play to consider, then investors can tap into one of the technology sector’s cheapest semiconductor makers, Intel Co. (NASDAQ: INTC). Finally, there’s the aircraft manufacturing stock Boeing Co. (NYSE: BA), which is a contrarian value play today.
Lithium Poised for a Bull Market Comeback: SQM Is a Must-Watch for Investors
The price of lithium has been crashing to below COVID-19 levels recently, which means a potential bottom could be coming soon. With stocks like overall market trends, which have massive upside potential as the company’s profit cycle starts to reach a bottom, this could become an industry-wide trend in the coming quarters.
Tesla Inc. (NASDAQ: TSLA) reported rising demand and orders in China, and the United States has now rolled out a $ 300-a-month lease program for its Model 3 to help out with the new vehicle market unaffordability crisis. This new demand tailwind for electric vehicles, plus the cyclically cheap lithium prices, can make for a bull cycle in this space shortly.
Wall Street analysts want to see Sociedad Quimica y Minera’s earnings per share (EPS) swing from a net loss of $0.88 this year to a net profit of $5.22 a share in 12 months. This aggressive swing into profitability could be enough to help the stock recover from its current 59% of its 52-week high.
Jefferies Financial set a price target of $55 a share for this stock, daring it to rally by as much as 43.9% from its current price. Analysts at the Goldman Sachs Group also gave this stock a ‘Buy’ rating as recently as August 2024.
Semiconductor Industry Controversy Pushes Intel Stock to an Undeniable Bargain
Now that Intel stock trades at a low of 38% from its 52-week high, investors should take a look inside the company beyond most of the oversupply belief currently driving the semiconductor industry. These same trends affected even the darling of the industry, NVIDIA Co. (NASDAQ: NVDA), by selling it down to 85% of its 52-week high after earnings.
Just like Sociedad Quimica y Minera, Wall Street analysts want to see Intel stock’s EPS swing from a net loss of $0.47 this year to a net profit of $0.42 in the next 12 months. Adding to the bullish sentiment in Intel stock, insiders, from CEO Pat Gelsinger to a U.S. congress member, have been buying the stock all of August 20204.
Even with the recent bearish price action and sentiment surrounding Intel stock, there are signs of a bottoming in the bearish gauge that could swing to bullish. Intel stock’s short interest declined by up to 9.6% in the past month, indicating a bearish capitulation in the face of the stock’s potential upside ahead.
More than that, institutional capital also made its way to Intel stock, with those at Legal & General Group leading the way by boosting their holdings by 1.3% as of August 2024. This addition nets the group’s investment at $1.2 billion today, which is only a tenth of the $13.5 billion that called Intel stock home over the past 12 months.
Boeing's Ongoing Drama May Already Be Priced Into the Stock
After a few incidents lately, Boeing stock is now trading down to 59% of its 52-week high, which could mean that most of the bad news is already priced in, as no new developments are affecting the stock negatively right now.
The trend of swinging to profitability shows up in this name as well. Wall Street analysts expect Boeing to make it out of its current $4.26 loss per share up to a net profit of $3.42 over the next 12 months. If the stock had much more downside or expected negative news to come out, bears would be happy to raid this name.
However, that’s not the case today, as Boeing’s stock short interest has declined by 9% over the past month alone. Replacing these short sellers leaving, Newport Trust Company boosted their holdings by 1.2% as of August 2024, netting their position by $5.8 billion today, or 5.1% ownership in the company.
All the bullish evidence stacking up helped those at Stifel Nicolaus land on a $235 price target for Boeing stock, which calls for up to 49.8% upside from the low it has traded to today.
