Buying stocks that are either beaten down or have been largely underperforming the broader indices can be a tough pill to swallow for many investors. With so many new, innovative, and exciting companies to choose from in the market these days, it might be difficult to get overly excited about value stocks. However, with so many traders and investors letting FOMO and pure momentum drive their decisions these days, there are plenty of overlooked stocks that are well-positioned to make a comeback this year.
The ultimate goal of investing and trading is to generate positive returns, which is why you shouldn’t forget about historically strong companies that aren’t in the spotlight anymore. Several companies have a shot at rebounding this year and potentially turning into big winners for your portfolio. Keep reading below to check out our list of 3 comeback stocks to buy in 2021.
First up is one of the largest independent oil & gas exploration and production companies in the world. We all know what happened to the price of oil last year, but things are already looking up for the energy sector in 2021 which means that ConocoPhillips is ripe for a comeback. The company has one of the strongest balance sheets in the industry and although it reported a Q4 net loss of $0.2 billion, it should see its oil & gas production improve this year as the effects of the pandemic start to diminish. This is especially true if we see a rebound in air travel, an important source of demand for oil companies.
Another great reason to consider adding shares of ConocoPhillips is the fact that the company has a clear commitment to returning cash to shareholders. The stock currently offers a 3.31% dividend yield and ConocoPhillips has reduced its capital requirements so that it can maintain its production while also being able to pay a dividend even at oil prices less than $40 per barrel. There’s also the company’s recent acquisition of Concho Resources, a Permian-focused exploration and production firm that will provide a larger resource base for ConocoPhillips in the long term. That means efficiency increases and a reduction in expenses are on the horizon for the company.
Semiconductor stocks have been hot over the last year, but Intel stock has been lagging. As a company that supplies the computing industry with the chips, boards, systems, and software that are the primary components of computer architecture, there’s room for a proven business like Intel in the semis space even though major competitors like NVIDIA and AMD are growing at a rapid pace. The company has had its fair share of struggles, including manufacturing delays with its 7nm chips, but make no mistake, Intel is still an industry-leading company trading at an attractive valuation.
There are several reasons to believe that an Intel comeback is on the cards for 2021. First, you have a recent CEO change that sees Robert Swan make way for VMware CEO Pat Gelsinger. Mr. Gelsinger is a former Intel Engineer that has vowed to reinvigorate the company’s engineering and manufacturing to help Intel return to its glory days. Also, unlike Intel’s fabless competitors, Intel manufactures its chips on its own, which could be another strength if a semiconductor-manufacturing company like Taiwan Semiconductor decides to increase its prices. Intel recently delivered a record for full-year revenue at $77.9 billion, an increase of 8% year-over-year. It also generated a record $35.4 billion in cash from operations. These are strong numbers that could be foreshadowing the company’s recovery.
Boston Scientific Corp (NYSE:BSX)
If you are interested in a potential comeback stock that offers exposure to the medical device industry, look no further than Boston Scientific. The stock is still trading below its pre-pandemic levels, which is odd considering that this is a quality health care company with a strong pipeline. Boston Scientific develops, manufactures, and markets medical devices used in things like interventional cardiology, peripheral interventions, vascular surgery, urology, and endoscopy. While the company had a setback last October when it announced a 3-year delay to the U.S. approval of its Acurate neo2TAVR system, there is still reason for optimism in 2021.
Since Boston Scientific’s devices are used in many elective procedures, the company could benefit as the volumes in these procedures picks up again. It’s also worth noting that several of the company’s product launches were delayed thanks to the pandemic that could be coming to market this year. The company also recently received FDA approval for a system to treat the symptoms of Parkinson’s disease as well as for treatment for peripheral artery disease. There’s a good chance that investors are undervaluing shares of Boston Scientific at this time and that the company sees strong earnings growth this year, which is why it could be a stock primed for double-digit returns in 2021.
Featured Article: Moving Average Convergence Divergence (MACD) 7 Low-Priced Dividend Stocks Under $10
The recent trading activity surrounding low-priced stocks like GameStop (NYSE:GME) is a reminder to investors of the high-risk nature involved with these stocks. Often when a stock trades for under $10 (also termed a penny stock), it is trading that low for a reason. The company may not be profitable, or in the case of GameStop, it finds itself with a business model that no longer fits with consumer trends.
But that’s not always the case. It is possible to find low-priced stocks, even penny stocks, that offer great value. This is particularly true if the stock offers investors a dividend. Dividend-earning stocks are a diversification source for a consumer’s portfolio, particularly if the dividend gets reinvested. It’s literally like paying yourself for owning the stock.
And the stocks in this presentation look ready also to deliver some additional stock price growth that can increase your total return.
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