5 Beaten-Down Stocks to Buy

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We’re in the midst of earnings season, stuck in the shadow of a market that seems content to simply spin its wheels. At the same time, we’re standing against the backdrop of Einhorn’s theory that technology stocks are in a bubble, plagued by ongoing tensions in Ukraine.

stocks-to-buyAnd with a dozen or so other distractions bouncing around in investors’ heads right now, it would be easy to forget to remain on the hunt for bargain stocks.

So, consider this your gentle reminder … as always, remain on the hunt for bargain stocks.

And if you don’t have time to shop around, here are five of the market’s top stocks to buy. They may have been beaten down lately, but seem ready to pop back up as investors remember they still have bigger-picture value.

Stocks to Buy: iRobot (IRBT)

stocks-to-buy-irbt-stockThe marketability of robots — not to mention their functionality — has quietly soared in the past couple of years. In fact, you might say that robotics technology has finally come of age. As evidence of just how far robots have come, earlier in the month, iRobot (NASDAQ:IRBT) landed another multi-million contract with the Department of Defense to supply robotics and parts to the military.

One would think this news would send IRBT stock soaring, but that’s not what happened here. iRobot shares are now below the price they were trading at when the DoD news came out. In fact, IRBT shares have fallen 25% since their early March peak.

But shareholders made a big mistake by selling. iRobot has managed to grow the top line in four of the past five years, and has turned a profit in all five of them … and that was before robots had become relatively common. Now that iRobot is something of a household word, revenues could really start to crank up, potentially pushing IRBT to the top of a list of great stocks to buy.

Stocks to Buy: Charter Communications (CHTR)

stocks-to-buy-chtr-stockEven though it’s the fourth-largest in the country, Charter Communications (NASDAQ:CHTR) is frequently left out of discussions of the nation’s major cable-television service providers. Perhaps the market is worried about the fact that income has been shrinking for several years despite rising revenue — a sign of worrisome long-term viability.

What investors may not realize about Charter Communications, however, is that the company has already begun converting its traditional cable-television signals to digital signals. The upgrade will improve service as well as bring new viewing options to current subscribers, and the overhaul should also lead to higher margins.

Yet, even with the 10% bounce we’ve seen from CHTR stock since last week’s lows, shares are still trading well below last year’s highs, and still have lots of room to keep rising before hitting any major headwinds. If you’re looking for stocks to buy, you could do a lot worse than CHTR.

Stocks to Buy: Waste Management (WM)

stocks-to-buy-wm-stockLike dividends? Waste Management (NYSE:WM) pays them — and increases them — like clockwork. And investors who wade into Waste Management now will find the yields on their investment in WM stock are a little sweeter thanks to 13% tumble the stock took between November of last year and March of this year.

Although shares of WM stock have advanced 7% from those March lows, the yield is still an attractive 3.6%. And there’s still plenty of room for the stock to reclaim the ground it lost over the past six months. Given all of that, there’s nothing trashy about this trash collector; it’s one of the market’s top stocks to buy.

Stocks to Buy: Brunswick (BC)

stocks-to-buy-bc-stockTalk about a tough crowd! Despite Brunswick (NYSE:BC) managing to top estimates in every quarter of 2011, 2012, and 2013, the recreation products company merely met estimates in Q1. As a result, BC stock sold off to the tune of 2.5% following the news, topping off what’s now become a 10% plunge from March’s highs. It looks like investors knew what was coming.

As Benjamin Graham said so well, though, “In the short run, the market is a voting machine but in the long run it is a weighing machine.” The pullback Brunswick doled out between early April and now was just a near-term vote in response to one quarter. In the long run, however, Brunswick is still the same company that has had a multi-year habit of topping estimates and growing the bottom line. One mediocre quarter doesn’t change that, and Brunswick is still one of the top stocks to buy.

Stocks to Buy: Bally Technologies (BYI)

stocks-to-buy-byi-stockThe casino and gaming industry may be struggling, but that doesn’t mean every company that equips casinos is in the same dire straits. Bally Technologies (NYSE:BYI), for instance, is on pace to grow per-share income by 27% in the current fiscal year (ending in June), and analysts believe it will improve profits per share to the tune of 15% next fiscal year.

That’s not too shabby, and the pot’s made even sweeter by the fact that BYI stock is only trading at a forward-looking P/E of 12.6, thanks to the 23% tumble from its mid-January highs.

The pullback likely began as a preemptive strike in front of February’s earnings results, which were mediocre at best. Jannay Capital downgraded BYI stock just a few days later, followed swiftly by a downgrade from Goldman Sachs in March. However, the sellers may have overshot with the stock. Bally Technologies is still in a solid growth trend, and there’s a reason Stifel made a point of saying earlier in the month that the dip was a long-term buying opportunity — BYI really is one of the better stocks to buy at this point.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2014/04/beaten-stocks-to-buy/.

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