While U.S. equities have surged in a historic rally to new record highs following the surprise Election Day victory of Donald Trump, many areas of the market haven’t participated. Breadth has narrowed as areas like industrials and financials lead the charge higher.
But now that investors have stepped back and surveyed the situation, bargain hunters are rounding back to these areas of lagging performance in search of value and performance.
Looking into 2017, investors looking for high-risk, high-reward stocks should concentrate on these areas, with a particular focus on smaller energy and gas and oilfield services companies poised to benefit from the rebound in crude.
Here are 10 stocks to watch.
High-Risk, High-Reward Stocks to Buy: GoPro (GPRO)
GoPro Inc (NASDAQ:GPRO) shares have struggled over the past two months, returning to their May lows after falling nearly by nearly one-half from their early October highs. Sellers hit hard as hype over new products — including the Hero 5 cameras and the Karma drone — gave way to disappointment.
The Hero 5 cameras are selling for lower average prices amid heightened competition and tepid demand. Meanwhile, the Karma drone suffered an embarrassing product recall amid reports of in-flight power failures.
But a turnaround — especially with its drone offering — could see shares nearly double in a retest of the 2016 highs. The company will next report results on Feb. 2 after the close. Analysts are looking for earnings of 27 cents per share on revenues of $591.6 million.
High-Risk, High-Reward Stocks to Buy: Baidu (BIDU)
Baidu Inc (ADR) (NASDAQ:BIDU) shares have been pushed down to their summertime lows, down about 15% from their recent highs, amid broad-based selling pressure against emerging market stocks.
Chinese equities in particular have been hit on a combination of economic growth concerns, a lingering bad debt problem and worries over a possible trade spat with the incoming Trump administration. Adding to the selling has been a rapid rise in the U.S. dollar, which has in turn decreased the valuation of foreign asset classes.
Any pullback in the dollar, possibly connected to a slower pace of Federal Reserve rate hikes in 2017, could result in a powerful short-covering rally in emerging market stocks like BIDU.
BIDU will next report results on Feb. 23 after the bell. Analysts are looking for earnings of 83 cents per share on revenues of $2.64 billion.
High-Risk, High-Reward Stocks to Buy: AbbVie (ABBV)
Drug maker AbbVie Inc (NYSE:ABBV) has seen shares roll lower from their summertime highs to continue a three-year-long sideways slide. The company, which is developing a range of treatments for ailments including leukemia, HIV and hepatitis, has been caught in the selling pressure that’s hit the entire biotech/pharma sector.
A rebound in 2017 could be spurred by clarification of President-elect Trump’s plans for healthcare reform and lowering drug prices. Merely a test of the 2015-2016 highs would be worth a 10% move from here.
The company will next report results on Jan. 27 before the bell. Analysts are looking for earnings of $1.19 per share on revenues of $6.9 billion.
High-Risk, High-Reward Stocks to Buy: Ford (F)
Ford Motor Company (NYSE:F) shares have been caught in a four-year downtrend, plummeting from a high of $16 in 2014 to test a low of $11 last month — a loss of nearly one-third — amid concerns the strength in auto sales would prove temporary. Indeed, as a result of surging long-term interest rates, auto sales came in much weaker than expected in November.
But a turnaround could be spurred by evidence of nascent wage inflation here in the United States, which will increase disposable incomes and purchasing power. Investors could also be punishing Ford for possible product concerns — the aluminum F-150 for instance — as shares of competitor GM recently hit new four-year highs.
The company will next report results on Jan. 26 before the bell. Analysts are looking for earnings of 36 cents per share on revenues of $35.5 billion.
High-Risk, High-Reward Stocks to Buy: Occidental Petroleum (OXY)
But the recent OPEC/non-OPEC supply freeze agreement, an effort to boost prices to alleviate fiscal stress in Persian Gulf countries, will likely result in a restart of U.S. drilling activity. Especially with President-elect Trump’s energy-friendly policies.
The company will next report results on Jan. 31 before the bell. Analysts are looking for earnings of 2 cents on revenues of $2.78 billion.
High-Risk, High-Reward Stocks to Buy: Baytex Energy (BTE)
Baytex Energy Corp (USA) (NYSE:BTE), a Canadian oil and gas company with just over a $1 billion market cap, suffered a whopping 90%-plus decline from their 2014 highs as the OPEC oil price war ravaged revenue and earnings.
The share price stabilized earlier in the year amid chatter of a OPEC supply freeze deal, unleashing a rally that saw BTE jump more than 600% from its January lows.
Since then, a nine-month trading range has been established as investors awaited actual progress on the production cap deal — which was confirmed in recent weeks.
Should energy prices continue to recover, watch for a powerful upside breakout. The company will next report results on March 7.
High-Risk, High-Reward Stocks to Buy: Pengrowth Energy (PGH)
Canadian oil and gas company Pengrowth Energy Corp (USA) (NYSE:PGH) looks ready for an upside breakout from an eight-month downtrend consolidation driven by broad weakness in independent energy producers. Shares fell from a high of $6.36 in the summer of 2014 — before the start of the OPEC oil price war — to a low of 45 cents in January for a total decline of 93%.,
While the share price has since tripled, there is more upside to come assuming the OPEC/non-OPEC supply freeze agreement successfully continues to push up energy prices. A return to the 200-week moving average, not touched in two years, would be worth a double from here.
High-Risk, High-Reward Stocks to Buy: Cameco (CCJ)
Uranium producer Cameco Corp (USA) (NYSE:CCJ) has seen shares rally nearly 50% off of their early November low, crossing over their 200-day moving average for the first time since June amid rising hope of an increase in nuclear power support from the incoming Trump Administration.
This is the start of a potentially long-legged recovery from the 73%-plus decline from the April high.
The company will next report results on Feb. 9 after the market. Analysts are looking for earnings of 42 cents per share on revenues of $597.54 million.
High-Risk, High-Reward Stocks to Buy: Oceaneering International (OII)
Oceaneering International (NYSE:OII) shares have recovered to levels not seen since June amid rising hopes for the recently agreed OPEC/non-OPEC production freeze agreement, rising nearly 40% from its November lows.
But shares have a long way to run to return to its late 2013 high near $81, after which investors suffered a 72% decline as demand for the company’s underwater drones used to support offshore drilling and production activity.
The company is next expected to report results on Feb. 8 after the close. Analysts are looking for earnings of 2 cents per share on revenues of $505.14 million.
High-Risk, High-Reward Stocks to Buy: Hornbeck Offshore Services (HOS)
Hornbeck Offshore Services, Inc. (NYSE:HOS) shares fell more than 95% from their late 2013 high to their October low amid the wipeout in energy prices and oil and gas stocks.
The company, which supports offshore drilling activity with its supply and support vessels and on-shore logistics facilities, has seen shares triple from the early November low to the mid-December high thanks to optimism about the energy policies of the incoming Trump administration as well as the OPEC/non-OPEC production freeze deal.
A push to the late April highs near $12 would be worth a 50% move from here. The company will next report results on Feb. 15 after the close. Analysts are looking for a loss of 51 cents per share on revenues of $44.5 million.