Contrarian Conquerors: 3 Stocks Triumphing Over Mainstream Market Beliefs


  • Go against the narrative with these contrarian stocks to buy.
  • T. Rowe Price (TROW): T. Rowe Price could rise as holistic navigation could become a valuable attribute.
  • United Microelectronics (UMC): United Microelectronics offers an indirect AI play.
  • Ericsson (ERIC): Ericsson is another beaten-down enterprise that brings AI-related solutions.
Contrarian Stocks - Contrarian Conquerors: 3 Stocks Triumphing Over Mainstream Market Beliefs

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Usually, it’s best to heed the advice of Wall Street experts rather than attempt to trailblaze some contrarian stocks. While no one is above criticism, the reality is that analysts earned their spot as market influencers. Still, in unusual cases, even the smartest folks may get certain ideas wrong.

That might be the case with these securities that have analyst sell ratings against them. However, with so many publicly traded enterprises available, it’s almost inevitable that a few companies just slip through the cracks. If you’re willing to absorb high risks, consider these contrarian stocks to buy.

T. Rowe Price (TROW)

T row price (TROW) logo magnified through a lens while displayed on a web browser
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Falling under the broad financial sector, T. Rowe Price (NASDAQ:TROW) operates as a publicly owned investment manager. Per its public profile, the firm provides financial services to individuals, institutional investors, retirement plans, intermediaries and institutions. Further, it launches and manages equity and fixed-income mutual funds. While it’s a big brand in high finance, analysts see things differently.

Oddly enough, Wall Street experts rate TROW a consensus moderate sell. Further, the average price target sits at $114.10, implying about 3% downside risk. The assessment breaks down as seven holds, three sells and conspicuously, no buy ratings. In some sense, though, it’s understandable. With retail investors rising to the forefront, people have taken a self-directed approach with their portfolios.

Here’s the thing. Most anyone can navigate a bull market. You pick a few solid enterprises and watch them rise. If all else fails, just buy an exchange-traded fund tracking the major indices and you should be good to go. However, it takes real skill to manage a less-than-ideal market cycle.

It’s not out of the realm of possibility that we could be headed toward such a circumstance. Thus, T. Rowe could regain its relevance. For me, it’s one of the contrarian stocks to buy.

United Microelectronics (UMC)

Semiconductors chips and blurred UMC United Microelectronics Corporation logo.
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Based in Taiwan, United Microelectronics (NYSE:UMC) falls under the semiconductor category of the broader tech ecosystem. Per its public profile, United operates as a wafer foundry. It provides circuit design, mask tooling and wafer fabrication. It also is involved in assembly and testing services. It offers wide relevancies, making UMC one of the candidates for contrarian stocks.

However, analysts have been pensive about the idea. For example, Bernstein’s Mark Li offered the most recent rating, which was a “sell.” Even worse, the expert sees a price target of $5.10, which implies 40% downside. It’s not difficult to see why many folks are skeptical. Over the past 52 weeks, UMC stock has only gained a little bit over 2%. That’s terrible for a tech enterprise.

At the same time, investors may look at the value proposition. Fundamentally, United – being a semiconductor foundry – offers positive implications regarding artificial intelligence. While it’s not a direct player in digital intelligence, UMC produces the chips that can be integrated in hardware designed for AI applications, such as application-specific integrated circuits or ASICs.

Financially, the valuation may attract speculators. Shares trade for only 14.62X forward earnings and a price/earnings-to-growth or PEG ratio of 0.56X.

Ericsson (ERIC)

A digital illustration of the telecom industry.
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Headquartered in Stockholm, Sweden, Ericsson (NASDAQ:ERIC) together with its subsidiaries provides mobile connectivity solutions for telecom operators and enterprise-level customers for multiple industries. It serves multiple international markets and operates in four segments: Networks, Cloud Software and Services, Enterprise and Other. With connectivity becoming a core component of life and business, ERIC in theory should be one of the top contrarian stocks.

Analysts have a differing view and that’s part of the problem. Currently, Wall Street experts have labeled ERIC a moderate sell with a $4.59 average price target. That implies downside risk of more than 25%. The assessment breaks down as one hold, two sells and no buys. Even the most optimistic target of $5.58 is below Friday’s closing price of $6.14.

However, Ericsson might have an ace up its sleeve. According to its website, the company is building cognitive networks and human trust in AI technology. It aims to foster improved performance, greater efficiency and a superior customer experience. The move may also spark greater utility for 5G, the Internet of Things and enterprise-level applications.

ERIC stock is also undervalued, trading hands at 12.69X forward earnings. In contrast, the sector median stands at 18.15X.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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