In this article, we will be taking a look at the 11 best beaten down stocks to buy now. To skip our detailed analysis of undervalued stocks and their potential, you can go directly to see the 5 Best Beaten Down Stocks to Buy Now.
With rising fears associated with the S&P 500 hitting a bear market in 2022, in light of major stocks declining at least 20% from their most recent highs, investors have been cautious about where they put their money. With the benchmark index losing 4% as of this June, the S&P 500 began running below its January peak by 21%, according to CBS News. Now in August, despite a 12.6% rise for this S&P 500 since its June low, US futures have again begun to slip, as noted by Bloomberg.
Even renowned names such as Snap Inc. (NYSE:SNAP), Amazon.com, Inc. (NASDAQ:AMZN), and Fidelity National Financial, Inc. (NYSE:FNF) have seen share price declines in the current bear market. Analysts at major investment banks have since noted that stocks in many sectors, including the tech sector, are presenting attractive buying opportunities with their discounted prices.
With the Federal Reserve slowing down the US economy, beaten down growth stocks are also presenting themselves as attractive investment options.
The Russell 1000 Growth Index rose by about 6.4% in times of recession, compared to a 4.4% rise for value stocks, since as far back as 1978, according to Reuters. This index has risen by 320% over the past decade, compared to a rise of 145% for its value counterpart over the same period.
Photo by Nick Chong on Unsplash
Our Methodology
The stocks in this list are taking a beating this year but can rebound strongly in the weeks and months to come. These stocks have posted year-to-date declines in their share prices as of August 1, but are popular among hedge funds and analysts alike. We have used Insider Monkey’s hedge fund data for the first quarter to show their popularity among the 912 funds we tracked that quarter, while noting analyst ratings and price targets to demonstrate positive analyst sentiment and upside potential harbored by each stock. The stocks are ranked on the basis of the number of hedge funds holding stakes in them, from the lowest to the highest.
Best Beaten Down Stocks to Buy Now
11. UBS Group AG (NYSE:UBS)
Number of Hedge Fund Holders: 12
Year-to-Date Price Share Decline as of August 1: 6.9%
Date of UBS Group AG (NYSE:UBS) hitting a 52-week low: July 26
UBS Group AG (NYSE:UBS) is a provider of financial advice and solutions to private, institutional, and corporate clients across the globe. The company operates through its Global Wealth Management, Personal & Corporate Banking, Asset Management, and Investment bank segments.
RBC Capital’s Anke Reingen holds an Outperform rating on UBS Group AG (NYSE:UBS) shares as of this July.
While UBS Group AG (NYSE:UBS) has been trading below its peak, the stock has been benefiting from trading gains. The company reported a net income of $2.1 billion in April, beating analyst estimates of $1.9 billion, after the volatility caused by the Russian invasion of Ukraine. UBS Group AG (NYSE:UBS) is also a stable dividend-payer with a 3.1% yield as of August 1, increasing its attractiveness as a 52-week low stock for investors today.
Out of 912 hedge funds, 12 funds were long UBS Group AG (NYSE:UBS) in the first quarter, compared to 14 hedge funds in the previous quarter. Their total stake values were $330 million and $273 million respectively.
10. Cincinnati Financial Corporation (NASDAQ:CINF)
Number of Hedge Fund Holders: 21
Year-to-Date Price Share Decline as of August 1: 13.9%
Date of Cincinnati Financial Corporation (NASDAQ:CINF) hitting a 52-week low: August 2
Cincinnati Financial Corporation (NASDAQ:CINF) is a property and casualty insurance company operating in the US. The company offers commercial leasing and financing services, alongside insurance brokerage services and more. It is headquartered in Fairfield, Ohio.
Having raised its dividend consistently for the past 61 years, Cincinnati Financial Corporation (NASDAQ:CINF) is among the most attractive dividend stocks even today. It currently pays a dividend of 2.8% as of August 1, and is one of the top 52-week low stocks in light of its dividend king status.
There were 21 hedge funds long Cincinnati Financial Corporation (NASDAQ:CINF) in the first quarter. Their total stake value was $171 million.
9. Callaway Golf Company (NYSE:ELY)
Number of Hedge Fund Holders: 29
Year-to-Date Price Share Decline as of August 1: 17.2%
Date of Callaway Golf Company (NYSE:ELY) hitting a 52-week low: May 10
Callaway Golf Company (NYSE:ELY) is a consumer discretionary company that designs and manufactures golf equipment, golf and lifestyle apparel, and other accessories. The company operates through its TopGolf, Golf Equipment, and Apparel, Gear and Other segments. It is based in Carlsbad, California.
As of this June, Jefferies analyst Randal Konik holds a Buy rating on Callaway Golf Company (NYSE:ELY). The analyst also has a $55 price target on the shares.
While Callaway Golf Company (NYSE:ELY) has been trading near a 52-week low stock, the company has good prospects according to analyst Konik, who named it as one of his top picks in lifestyle and growth platforms this June. Callaway Golf Company’s (NYSE:ELY) management also increased the company’s full-year 2022 revenue outlook in May to a range of $3,935 million to $3,970 million, citing the TopGolf segment as a key driver of revenue gains in the near future.
Callaway Golf Company (NYSE:ELY) had 29 hedge funds long its stock in the first quarter. Their total stake value was $384 million.
Bernzott Capital Advisors, an investment management firm, mentioned Callaway Golf Company (NYSE:ELY) in its third quarter 2021 investor letter. Here’s what they said:
“Callaway Golf (ELY): The stock succumbed to profit taking despite a strong earnings report as some perceived pandemic beneficiaries such as Callaway sold off as investors questioned sustainability. In our view, Callaway’s future looks bright, especially as it captures growth opportunities from its acquisition of Topgolf. Despite this quarter’s weakness, the stock remains up +15% for the year.”
Like Snap Inc. (NYSE:SNAP), Amazon.com, Inc. (NASDAQ:AMZN), and Fidelity National Financial, Inc. (NYSE:FNF), Callaway Golf Company (NYSE:ELY) is a stock investors are piling into today.
8. Texas Roadhouse, Inc. (NASDAQ:TXRH)
Number of Hedge Fund Holders: 35
Year-to-Date Price Share Decline as of August 1: 3.1%
Date of Texas Roadhouse, Inc. (NASDAQ:TXRH) hitting a 52-week low: May 24
Texas Roadhouse, Inc. (NASDAQ:TXRH) is another consumer discretionary company on our list, operating casual dining restaurants in the US and internationally. The company operates and franchises restaurants under the Texas Roadhouse, Bubba’s 33, and Jaggers names. As of December 2021, it operated 566 domestic restaurants alongside 101 franchise restaurants.
Brian Mullan, an analyst at Deutsche Bank, holds a Buy rating on Texas Roadhouse, Inc. (NASDAQ:TXRH) shares as of this July. The analyst also raised his price target on the stock from $91 to $97.
Texas Roadhouse, Inc. (NASDAQ:TXRH) shares as set to reap benefits from the company’s sales growth during the first quarter, when growth of 16% was reported for company-owned restaurants, and 20% for franchised domestic restaurants. Several market analysts, including Dennis Geiger from UBS, see the company as being more resilient than its competitors.
Our hedge fund data for the first quarter shows 35 hedge funds long Texas Roadhouse, Inc. (NASDAQ:TXRH). Their total stake value was $796 million. Melvin Capital Management was the largest stakeholder in Texas Roadhouse, Inc. (NASDAQ:TXRH), holding 1,792,351 shares worth over $150 million.
7. Paramount Global (NASDAQ:PARA)
Number of Hedge Fund Holders: 40
Year-to-Date Price Share Decline as of August 1: 26.6%
Date of Paramount Global (NASDAQ:PARA) hitting a 52-week low: August 1
Paramount Global (NASDAQ:PARA) is a global media and entertainment company. It distributes a schedule of news and public affairs broadcasts, alongside sports and entertainment programming. The company also acquires or develops programming on the CBS Television Network.
James Goss, an analyst at Barrington, holds a Market Perform rating on Paramount Global (NASDAQ:PARA) shares as of this July. The analyst believes that the company still has a significant opportunity to succeed, indicating his optimism about the 52-week stock’s long-term performance.
Paramount Global (NASDAQ:PARA) is also a strong dividend-payer with a 4.1% yield as of August 1. While the stock is currently trading low, this may be seen as an opportunity to buy it at a discount while benefiting from generous dividend payouts.
In the first quarter of 2022, 40 hedge funds were long Paramount Global (NASDAQ:PARA), compared to 64 hedge funds in the previous quarter. Their total stake values were $3.4 billion and $1 billion respectively.
6. Barrick Gold Corporation (NYSE:GOLD)
Number of Hedge Fund Holders: 45
Year-to-Date Price Share Decline as of August 1: 15.1%
Date of Barrick Gold Corporation (NYSE:GOLD) hitting a 52-week low: July 25
Barrick Gold Corporation (NYSE:GOLD) is a materials company engaged in the exploration, mine development, production, and sale of gold and copper properties. The company owns interests in producing gold mines in Argentina, Canada, Côte d’Ivoire, the Democratic Republic of Congo, Dominican Republic, Mali, Tanzania, and the US.
Stifel’s Ingrid Rico holds a Buy rating on shares of Barrick Gold Corporation (NYSE:GOLD) as of this July. Rico also has a price target of $27.6 on the shares.
Barrick Gold Corporation (NYSE:GOLD) is among the top 52-week low stocks to invest in today, in light of gold futures reversing this July from their earlier losses. The European Central Bank’s move to raise interest rates unexpectedly high resulted in stocks like Barrick Gold Corporation (NYSE:GOLD) benefitting. Barclays analyst Matthew Murphy also noted this July that copper equities, despite facing headwinds on a macro and fundamental level, were beginning to reflect better value. This development is also of benefit to Barrick Gold Corporation (NYSE:GOLD), on which Murphy holds an Overweight rating.
As of the close of the first quarter, 45 hedge funds held stakes in Barrick Gold Corporation (NYSE:GOLD). Their total stake value was $1.4 billion. Charles Paquelet’s Skylands Capital was the largest stakeholder in the company, holding 360,100 shares worth $6.4 million.
ClearBridge Investments, an investment management firm, mentioned Barrick Gold Corporation (NYSE:GOLD) in its first quarter 2022 investor letter. Here’s what they said:
“Also within the structural bucket, we have selectively added to our commodity exposure with the purchase of Barrick Gold (NYSE:GOLD). Canadian mining company Barrick Gold is a play on operating improvements. The company has aggressively delevered its balance sheet and reduced capex spending to a lower level more permanently, directing its healthy free cash flow to dividends and buybacks.”
Barrick Gold Corporation (NYSE:GOLD), like Snap Inc. (NYSE:SNAP), Amazon.com, Inc. (NASDAQ:AMZN), and Fidelity National Financial, Inc. (NYSE:FNF), is an attractively priced stock option for hedge funds in 2022.
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Disclosure: None. 11 Best Beaten Down Stocks to Buy Now is originally published on Insider Monkey.
