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7 Heavily Discounted Stocks to Buy Today in 2020

7 Heavily Discounted Stocks to Buy TodayPosted on Friday, December 14th, 2018 by Chris Markoch

It’s the season of giving. But the market hasn’t been in a very giving mood. October and November have seen some of the most trendy stocks stumble to find solid ground. Marijuana stocks? Down in a puff of smoke. FAANG stocks? They lost their bite. Even oil stocks that seemed to be recovering look like a gigantic head fake.

But the question investors really want an answer to is why are so many good stocks down? And there’s plenty to look for there as well. Interest rates are rising and are expected to do so through 2019. The trade war with China shows no sign of stopping anytime soon and speaking of China – their economy is showing signs of weakness that are giving investors pause. And just for good measure, investors are still trying to discern exactly how the mid-term elections will affect our economic and monetary policy.

However, the news isn't all bad. Analysts are expecting to see strong earnings reports. Unemployment is down, consumer confidence is up. And by the looks of Black Friday and Cyber Monday, the Holiday season is off to a strong start. All we need is the traditional and expected Santa Claus rally.

As an investor, now is the time to look through the clearance rack and buy some quality stocks that are heavily discounted right now. These are good stocks that have come upon hard times. But they are showing signs of recovery, and this makes now the perfect time to buy them and ride them into the Holidays and beyond.

#1 - JD.com (NASDAQ:JD)

JD.Com logo

JD.com (NASDAQ: JD) - This e-commerce company has had a rough go of it in 2018, and the problem is not spelled Amazon. Like many Chinese stocks, the trade war took its toll, which may or may not has contributed to a significant slowing in its revenue growth rate. But just when the market was digesting those concerns, the company, CEO, Richard Liu, was named in a sexual assault allegation that clearly sent the stock reeling. After hitting a high of $50 per share earlier in the year, the stock is currently stuck in a range and struggling to rise much above $20 per share. That puts it an area that is approximately 0.5x sales. Unless you see the trade war with China remaining unresolved, or there to be a fundamental problem with the company’s model, this seems like a case of a stock that is very undervalued. The company is forecasting revenues to increase by 30% next year. Even if they come in slightly below, there is a good reason to expect its stock price to rise.

About JD.Com
JD.com, Inc., through its subsidiaries, operates as an e-commerce company and retail infrastructure service provider in the People's Republic of China. It operates in two segments, JD Retail and New Businesses. The company offers home appliances; mobile handsets and other digital products; desktop, laptop, and other computers, as well as printers and other office equipment; furniture and household goods; apparel; cosmetics, personal care items, and pet products; women's shoes, bags, jewelry, and luxury goods; men's shoes, sports gears, and fitness equipment; automobiles and accessories; maternal and childcare products, toys, and musical instruments; and food, beverage, and fresh produce. It also provides gifts, flowers, and plants; nutritional supplements; books, e-books, music, movie, and other media products; and virtual goods, such as online travel agency, attraction tickets, and prepaid phone and game cards, as well as industrial products. In addition, the company offers an online marketplace for third-party sellers to sell products to customers; and transaction processing and billing, value-added fulfillment, and other services. Further, it provides online marketing services for suppliers, merchants, and other partners; supply chain and logistics services for various industries; and consumer financing services to individual customers. Additionally, the company offers online-to-offline solutions, as well as online and in-person payment options and customer services. JD.com, Inc. offers its products through its Website jd.com and mobile apps, as well as directly to customers. As of December 31, 2018, JD.com, Inc. operated fulfillment centers in 7 cities; and 550 warehouses in 81cities covering various counties and districts. The company has strategic cooperation agreement with Tencent Holdings Limited. JD.com, Inc. is headquartered in Beijing, China.

Current Price: $39.55
Consensus Rating: Buy
Ratings Breakdown: 16 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $36.67 (-7.3% Upside)

#2 - A.O. Smith (NYSE:AOS)

A. O. Smith logo

A.O. Smith (NYSE: AOS) - Another China stock to look at is A.O. Smith. This company has an $8 billion market cap and they are the leader in products such as water heaters, boilers, and other water treatment products. While this may not be as sexy as e-commerce, it may be a safer bet, particularly in an uncertain trade environment. In the last 10 years, the stock has risen from $6 per share to a high of $65 before falling back since the trade war with China began. The stock is down about 30% from its high and that is a great reason to buy. The reason for this is supply and demand. China has a burgeoning middle class that needs the company’s products. This has allowed the company to achieve double-digit revenue growth. The stock is currently trading at around 16X forward earnings which, for a stock that is considered to fall in the “defensive” category is pretty reasonable, particularly when its growth shows no sign of slowing down. And investors who are interested in this “utility” stock are looking for dividends. This is another area where A.O. Smith delivers. The company has been issuing, and increasing, their dividend recently. In 2018, they recently increased their dividend by 22%.

About A. O. Smith
A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, tanks, and water treatment products in North America, China, Europe, and India. It operates through two segments, North America and Rest of World. The company offers water heaters for residences, restaurants, hotels and motels, office buildings, laundries, car washes, and small businesses; residential and commercial boilers for space heating applications in hospitals, schools, hotels, and other commercial buildings; and water treatment products, including on-the-go filtration bottles, point-of-use carbon and reverse osmosis products, point-of-entry water softeners, and whole-home water filtration products for residences, restaurants, hotels, and offices. It also provides food and beverage filtration products; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and heat pumps, combi-boilers, solar tank units, and air purification products. The company offers its products primarily under the A. O. Smith and State brands. It distributes its products through independent wholesale plumbing distributors, as well as through retail channels consisting of hardware and home center chains, and manufacturer representative firms; and offers Aquasana branded products directly to consumers through e-commerce, as well as other online retailers. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.

Current Price: $45.43
Consensus Rating: Hold
Ratings Breakdown: 4 Buy Ratings, 6 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $54.43 (19.8% Upside)

#3 - Goldman Sachs (NYSE:GS)

Goldman Sachs Group logo

Goldman Sachs (NYSE: GS) - Investment banks may have a reputation that is comparable to Ebenezer Scrooge, but analysts are using recent events to be the Grinch that is stealing holiday joy from Goldman’s stock. And to be sure, nobody is going to feel sorry for a stock that is still trading north of $200 per share. Still, if you’re looking for stocks that are selling at a discount (it dropped over ten percent in a week), Goldman Sachs should draw interest.  The company is involved in a scandal involving the Malaysian finance minister’s request for a $600 million refund of fees associated with Goldman’s involvement in underwriting bonds of Malaysia’s 1MDB fund. Now claims of theft are not to be taken lightly, but there are two things to consider. First, scandals of this sort are not new to investment banks. They usually end up being settled with fines and a stern reprimand from regulators. But right now Goldman’s punishment which is currently measured as a stock price that is down disproportionately to the amount of market cap that is being implicated. Second, even if GS has to pay the full $600 million, it would be equivalent to a hit of less than $2 per share (or less than 1%) of the company’s stock.

About Goldman Sachs Group
The Goldman Sachs Group, Inc. operates as an investment banking, securities, and investment management company worldwide. It operates in four segments: Investment Banking, Institutional Client Services, Investing & Lending, and Investment Management. The Investment Banking segment provides financial advisory services, including strategic advisory assignments related to mergers and acquisitions, divestitures, corporate defense activities, restructurings, spin-offs, and risk management; and underwriting services, such as debt and equity underwriting of public offerings and private placements of various securities and other financial instruments, as well as derivative transactions with public and private sector clients. The Institutional Client Services segment is involved in client execution activities related to making markets in cash and derivative instruments for interest rate products, credit products, mortgages, currencies, commodities, and equities; and provision of securities services comprising financing, securities lending, and other brokerage services, as well as the marketing and clearing of client transactions on various stock, options, and futures exchanges. The Investing & Lending segment invests in and originates longer-term loans; and makes investments in debt securities and loans, public and private equity securities, and infrastructure and real estate entities, as well as provides unsecured and secured loans through its digital platforms. The Investment Management segment offers investment management services; and wealth advisory services consisting of portfolio management, financial planning and counseling, and brokerage and other transaction services. The company serves corporations, financial institutions, governments, and individuals. The Goldman Sachs Group, Inc. was founded in 1869 and is headquartered in New York, New York.

Current Price: $241.92
Consensus Rating: Buy
Ratings Breakdown: 13 Buy Ratings, 5 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $263.19 (8.8% Upside)

#4 - Transcanada (NYSE:TRP)

Tc Pipelines logo

Transcanada (NYSE: TRP) - Transcanada is a great energy stock that finds itself on the clearance rack because of the problems besetting the oil industry. While consumers are enjoying lower prices at the pump, investors have a follow the herd mentality when it comes to crude stocks and right now that means a wave of selling. However, TRP’s stock which has followed other energy stocks in a downward direction is now ripe for a resurgence. The company  – which owns the Keystone pipeline among other natural gas pipelines and other energy-related assets – has generated 19 years of 13% compounded annual returns. If that wasn’t enough, the company is projecting an 8% to 10% dividend hike for the next five years. And if investors need further convincing, they should remember that Transcanada is also a leader in the natural gas market which has surged 50% in advance of the heating season.

About Tc Pipelines
TC Energy Corporation operates as an energy infrastructure company in North America. It operates through Canadian Natural Gas Pipelines, U.S. Natural Gas Pipelines, Mexico Natural Gas Pipelines, Liquids Pipelines, and Energy segments. The company transports natural gas to local distribution companies, power generation plants, industrial facilities, interconnecting pipelines, and other businesses. It owns and operates wholly-owned natural gas pipelines of 81,500 kilometers and partially-owned natural gas pipelines of 11,100 kilometers; and regulated natural gas storage facilities with a total working gas capacity of 535 billion cubic feet. The company also owns and manages midstream assets that provide natural gas producer services, including gathering, treatment, conditioning, processing, and liquids handling with a focus on the Appalachian Basin. In addition, it owns and operates liquids pipelines infrastructure for the transportation of Alberta crude oil supplies to the refining markets in Illinois, Oklahoma, and the U.S. Gulf Coast, as well as U.S. crude oil supplies from the market hub at Cushing, Oklahoma to the U.S. Gulf Coast. Further, the company operates 10 power generation facilities with a power generation capacity of 6,615 megawatt powered by natural gas and nuclear fuel sources located in Alberta, Ontario, Québec, New Brunswick, and Arizona; and owns and operates approximately 118 billion cubic feet of unregulated natural gas storage capacity in Alberta. The company was formerly known as TransCanada Corporation and changed its name to TC Energy Corporation in May 2019. TC Energy Corporation was founded in 1951 and is headquartered in Calgary, Canada.

Current Price: $55.01
Consensus Rating: Hold
Ratings Breakdown: 4 Buy Ratings, 5 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $66.43 (20.8% Upside)

#5 - Schlumberger (NYSE:SLB)

Schlumberger logo

Schlumberger (NYSE: SLB) - This oil stock is a technical analyst’s dream. The last time the crude oil market took a tumble down all the way down to $27 per barrel, Schlumberger’s stock hit a low of $65 per share. The current crude oil correction has prices at around $50, nearly double their low point in 2016, but Schlumberger’s stock has fallen to $48 per share. That 25% decline from its 2016 levels seems like a hefty discount for a company that hasn’t lost its industry leadership position and continues to pay a dividend despite the drop in crude prices over the last few years. Schlumberger appears to be a company caught up in the overall selloff taking place with crude stocks. The oil industry will rebound. The question is when. That’s hard to tell. What’s easy to forecast is that SLB will still be a leader and may even benefit from weaker companies that may become insolvent as the oil crisis drags on.

About Schlumberger
Schlumberger Limited supplies technology for reservoir characterization, drilling, production, and processing to the oil and gas industry worldwide. The company's Reservoir Characterization segment offers reservoir interpretation and data processing services; open and cased-hole, and slickline services; exploration and production pressure and flow-rate measurement services; tubing-conveyed perforating services; integrated production systems; software, consulting, information management, and IT infrastructure services; reservoir characterization, field development planning, and production enhancement consulting services; petro technical data services and training solutions; and integrated management services. Its Drilling segment designs, manufactures, and markets roller cone and fixed cutter drill bits; supplies drilling fluid systems, fluid systems and specialty equipment, production technology solutions, and engineered managed pressure and underbalanced drilling solutions; and offers environmental services and products. This segment also provides drilling and measurement, land drilling rigs, and related support services; and supplies well planning and drilling, engineering, supervision, logistics, procurement, and contracting services, as well as drilling rig management services. The company's Production segment offers well services; coiled tubing equipment; hydraulic fracturing, multistage completions, perforating, coiled tubing equipment, and services; well completion services and equipment; artificial lift production equipment and optimization services; and production management services. Its Cameron segment offers integrated subsea production systems; drilling equipment and services; onshore and offshore platform wellhead systems and processing solutions; and valve products and measurement systems. The company was formerly known as Socie´te´ de Prospection E´lectrique. Schlumberger Limited was founded in 1926 and is based in Houston, Texas.

Current Price: $35.77
Consensus Rating: Buy
Ratings Breakdown: 14 Buy Ratings, 6 Hold Ratings, 2 Sell Ratings.
Consensus Price Target: $42.71 (19.4% Upside)

#6 - British American Tobacco (NYSE:BTI)

British American Tobacco logo

British American Tobacco (NYSE: BTI) - Under the category of systematic risk, we have the case of British American Tobacco. The FDA continues to rattle investors with threats that they will make good on their threats to ban menthol cigarettes – a move that would hurt BTI more than most because it is Reynolds American unit is the owner of Newport, the leading menthol brand. However the question is has the fallout already been priced into the stock. The stock has dropped over 50% in recent months, which does not make sense for, aside from the proposed ban, operates in what is considered a defensive sector. Consumers tend to indulge their vices regardless of market conditions. As evidence of this, tobacco and liquor stocks have historically been the top two sectors in terms of market returns over the past 80 years. This would make the drop in the company's stock seem a little overdone. And even if the ban is implemented, the company only reports 25% of its profits as coming from menthol products, making it likely that they could weather the storm just fine. The bottom line is this stock offers a great dividend yield of just under 7% and has a P/E ratio of just 9x earnings.

About British American Tobacco
British American Tobacco p.l.c. provides cigarettes and other tobacco products worldwide. It manufactures vapour and tobacco heating products; oral tobacco and nicotine products, such as snus, tobacco-free nicotine pouches, and moist snuff; cigars; and e-cigarettes. The company offers its products under the Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans, Newport, Camel, Natural American Spirit, Vogue, Viceroy, Kool, Peter Stuyvesant, Craven A, Benson & Hedges, John Player Gold Leaf, State Express 555, and Shuang Xi brands. The company sells its products to retail outlets. British American Tobacco p.l.c. was founded in 1902 and is headquartered in London, the United Kingdom.

Current Price: $44.55
Consensus Rating: Buy
Ratings Breakdown: 3 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $50.00 (12.2% Upside)

#7 - Qualcomm (NASDAQ:QCOM)


Qualcomm (NASDAQ: QCOM) - Does Qualcomm know something that other investors don’t? A $30 billion share buyback has investors saying yes. The company’s stock fell dramatically after their bid to merge with NXP Semiconductor fell through. However, investors seem to see the stock buyback as a reason to buy. In response, shares have advanced 40% in recent months only to see them get punished again as all tech stocks declined in October and the company had a lackluster earnings report.  But Qualcomm does have some metrics in its favor. It has a licensing franchise on 3G and 4G patents that can provide the company with a predictable and hefty cash flow for the foreseeable future. And although it faces increased competition, the market for 5G is looking like it will also be favorable. Most notably, Qualcomm has been embroiled I litigation with Apple. This looks to be trending in Qualcomm’s favor. No matter what happens, a mere resolution would help stabilize the struggling stock. But if investors are looking for an immediate reason to buy, they can look at a 4.5% dividend yield.

QUALCOMM Incorporated designs, develops, manufactures, and markets digital communication products worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). The QCT segment develops and supplies integrated circuits and system software based on code division multiple access (CDMA), orthogonal frequency division multiple access, and other technologies for use in wireless voice and data communications, networking, application processing, multimedia, and global positioning system products. The QTL segment grants licenses or provides rights to use portions of its intellectual property portfolio, which include various patent rights useful in the manufacture and sale of wireless products comprising products implementing CDMA2000, wideband CDMA, CDMA time division duplex, long term evolution, and/or fifth generation standards and their derivatives. The QSI segment invests in early-stage companies in various industries, including automotive, Internet of things, mobile, data center, and healthcare for supporting the design and introduction of new products and services for voice and data communications, and new industry segments. The company also provides products and services for mobile health; products designed for the implementation of small cells; development, and other services and related products to the United States government agencies and their contractors; and software products, and content and push-to-talk enablement services to wireless operators. In addition, it licenses chipset technology, and products and services for use in data centers. QUALCOMM Incorporated was founded in 1985 and is headquartered in San Diego, California.

Current Price: $89.65
Consensus Rating: Buy
Ratings Breakdown: 15 Buy Ratings, 8 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $90.24 (0.7% Upside)

Santa Claus may be coming to Wall Street, but the news may not be jolly for every stock. However, when investors are looking for stocks that show a strong potential to post gains into 2019, these seven stocks should receive strong consideration. For these stocks, it looks like the bad news has already been factored into their stocks. In fact, for almost all of these stocks, their stock price is currently trading at levels that are virtually screaming buy.

From e-commerce and tobacco to oil and gas and technology, these stocks spread joy across a variety of sectors. To be sure, the market remains an uncertain place. And that uncertainty will continue into 2019. But every market presents opportunities, and this market is no different. These seven stocks have had some lumps of coal put in their stocking and they appear to be ready to deliver sweet rewards to investors who are savvy enough to snap them up.

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