U.S. equities are continuing to hold near the unchanged line on Wednesdays investors worry about the prospect of a government shutdown on Friday as well as the still undetermined fate of tax reform legislation working through Congress.
Still, odds are quite good that not only do Democrats and Republicans figure out a way to keep the government funded — even if just on a short-term basis — but also iron out differences between the Senate and House tax bills.
Plus, we’re in the midst of the holiday shopping season. All this suggests many stocks, especially retailers, are due for powerful rebounds. According to both UBS and Credit Suisse analysts, retailers are among the sector groups poised to benefit the most from current tax cut plans. The result has been the powerful rotation out of year-to-date winners in areas like big-cap tech into these beaten down names.
Here are five to buy:
Turnaround Stocks to Buy: JCPenney (JCP)
J C Penney Company Inc (NYSE:JCP) shares have stabled with a 30% rally off of the lows seen in early November. Overall, the stock is down some 70% from the levels seen late last year as the company’s turnaround plans have struggled in a difficult environment for traditional retailers.
But signs of traction abound, with a move to add high-priced appliances to stores to collaborations with Sephora in cosmetics and more.
The company will next report results on Feb. 23 before the bell. Analysts are looking for earnings of 43 cents per share on revenues of $3.96 billion. When the company last reported on Nov. 10, a loss of 33 cents per share beat estimates by 10 cents on a 1.8% drop in revenues.
Turnaround Stocks to Buy: Snap (SNAP)
Recent high-profile tech IPO Snap Inc (NYSE:SNAP) has seen shares struggle as investors have doubted the company’s somewhat confusing strategic direction (“Camera company” and all that) amid an overzealous push into consumer electronics (the Spectacles) and increased competition from the likes of Facebook Inc (NASDAQ:FB) and others.
But a cool new iPhone X feature set and an effort to make its app more user-friendly should pay dividends in the quarters to come.
The company will next report results on Feb. 1 after the close. Analysts are looking for a loss of 16 cents per share on revenues of $252.5 million.
When the company last reported on Nov. 7, a loss of 14 cents per share beat estimates by a penny on a 62.2% rise in revenues.
Turnaround Stocks to Buy: Target (TGT)
Target Corporation (NYSE:TGT) shares are climbing up and off of a multi-month range of support established during the summer thanks to a solid Black Friday performance and management plans to invest in its store base to revitalize the shopping experience and work to lower prices relative to competitors. A fancy new in-store app also shows a commitment to its e-commerce offering.
The company will next report results on Feb. 28 before the bell. Analysts are looking for earnings of $1.20 per share on revenues of $22.1 billion. When the company last reported on Nov. 15, earnings of 91 cents per share beat estimates by five cents on a 1.4% rise in revenues.
Turnaround Stocks to Buy: Office Depot (ODP)
It’s been tough going in the office supply space for years, with a wave of consolidations unable to stem the bleeding of intense competition, online movement, and simply less demand for paper in this increasingly digital-only world.
But thanks to reduced brick-and-mortar competition and an effort to focus on business services, Office Depot Inc (NASDAQ:ODP) look ready to claw back some of the 50% loss suffered from the highs of early August.
The company will next report results on March 1 before the bell. Analysts are looking for earnings of seven cents per share on revenues of $2.6 billion. When the company last reported on Nov. 9 earnings of 14 cents per share beat estimates by one cent on a 7.6% decline in revenues.
Turnaround Stocks to Buy: Campbell Soup (CPB)
Campell Soup Company (NYSE:CPB) shares are rising off of a multi-month base around the $45-a-share level, threatening a pushup and out of a downtrend pattern that’s been in place since February.
Pressures include a bevy of analyst downgrades recently, highlighting everything from inventory reductions at retailers to problems with carrot yields. But I’m hopeful the company can remake its image in this organic, whole-food environment with a focus on healthful, convenient meals.
The company will next report results on Feb. 16 before the bell. Analysts are looking for earnings of 82 cents per share on revenues of $2.2 billion. When the company last reported on Nov. 21, earnings of 92 cents per share missed estimates by five cents on a 1.9% decline in revenues
Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
