Check out these potential buying opportunities near their 52-week lows.
The S&P 500 rallied 5.5% on Nov. 10 after the latest consumer price index, or CPI, reading came in lower than anticipated. Investors cheered the news that the Federal Reserve may finally be making progress in combating inflation. Some investors see the S&P 500’s best day since April 2020 as a sign that the 2022 bear market is finally over. Even after the CPI rally, there are still opportunities to snatch up stocks near their 2022 lows. Here are eight stocks to buy that are still within 6% of their 52-week lows and have “buy” ratings from Bank of America analysts.
Walt Disney Co. (ticker: DIS)
Walt Disney is a diversified global entertainment conglomerate that operates theme parks and produces TV and movie content. Disney shares hit a new multiyear low of $86.28 earlier this month following the company’s disappointing third-quarter earnings report. Analyst Jessica Reif Ehrlich says investors should buy Disney on the dip, given its earnings report was not as bad as it may have seemed at first glance. She says Disney’s theme park demand is healthy, and its operating income miss was largely due to one-time items. Bank of America has a “buy” rating and $115 price target for DIS stock, which closed at $95.01 on Nov. 11.
Medtronic PLC (MDT)
Medtronic is a health care device manufacturer that operates in four segments: cardiovascular, medical surgical, neuroscience and diabetes. The company is planning to spin off its patient monitoring and respiratory interventions business as part of a plan to streamline its portfolio and focus on higher-growth sales. Medtronic recently reported that it missed its primary efficacy endpoint for its proprietary system that aims to reduce ambulatory systolic blood pressure. Analyst Travis Steed says Medtronic remains confident that the product works based on data from several other clinical trials. Bank of America has a “buy” rating and $120 price target for MDT stock, which closed at $83.55 on Nov. 11.
Telefonica Brasil SA (VIV)
Telefonica Brasil is a subsidiary of Spanish multinational telecom firm Telefonica SA (TEF) and is the leading wireless carrier in Brazil. The stock hit its 2022 low of $7.39 in September and hasn’t recovered much since then. Analyst Fred Mendes says Telefonica Brasil is transitioning from its legacy products to fiber optic services, and he anticipates that the company will return to growth in its fixed-line business after five years of declines. Mendes says the company’s premium mobile customer base has been resilient in a challenging macroeconomic environment. Bank of America has a “buy” rating and $11 price target for VIV stock, which closed at $7.74 on Nov. 11.
Southwest Gas Holdings Inc. (SWX)
Southwest Gas is a natural gas distribution and transportation company that serves customers in Arizona, Nevada and California. The company also has a construction services segment that provides pipe construction and maintenance services. SWX shares dropped as low as $62.84 in November, but analyst Julien Dumoulin-Smith says Southwest has an attractive valuation and a potential bullish catalyst in divestments of MountainWest Pipeline and Centuri assets. Dumoulin-Smith projects 20.4% earnings growth and 7.3% revenue growth in 2023 and says risk is to the upside. Bank of America has a “buy” rating and $87 price target for SWX stock, which closed at $66.45 on Nov. 11.
Fox Corp. (FOXA)
Fox is a news, sports and entertainment company spun off from Twenty-First Century Fox in 2019. Fox shares recently dropped to their lowest level since 2020 after the company reached an agreement with FanDuel’s parent company Flutter Entertainment PLC (PDYPF) to acquire an 18.6% stake in FanDuel at a $20 billion valuation, much higher than the $11.2 billion valuation Fox was seeking. Fox now has significant exposure to online sports betting, which Reif Ehrlich says will prove to be synergistic with Fox’s best-in-class portfolio of sports assets. Bank of America has a “buy” rating and $42 price target for FOXA stock, which closed at $30.52 on Nov. 11.
Mattel Inc. (MAT)
Mattel is a leading toy company and owner of popular brands such as Barbie, Fisher-Price and Hot Wheels. The company reported a 63.5% drop in net income and a 0.3% drop in revenue in the third quarter. To add insult to injury, Mattel recently agreed to pay a $3.5 million fine to the U.S. Securities and Exchange Commission for misstating earnings back in 2017. Haas says point-of-sale trends should improve in the fourth quarter, driven by increased advertising, promotions and retailer partnerships. Bank of America has a “buy” rating and $26 price target for MAT stock, which closed at $17.16 on Nov. 11.
Arco Platform Ltd. (ARCE)
Arco Platform is an educational platform focused on private K-12 schools in Brazil. Mendes says the company’s planned acquisition of software maker Isaac creates cross-selling opportunities for Arco. While the deal will dilute Acro’s shareholders by 14%, he says Isaac will become break-even on an earnings before interest, taxes, depreciation and amortization basis by 2024. Mendes says Arco is well positioned to capitalize on a rapidly growing and relatively underpenetrated K-12 market in Brazil. He projects revenue growth of 23.3% in 2023 and 18.3% in 2024. Bank of America has a “buy” rating and $21 price target for ARCE stock, which closed at $10.11 on Nov. 11.
7 stocks to buy near 52-week lows:
— Walt Disney Co. (DIS)
— Medtronic PLC (MDT)
— Telefonica Brasil SA (VIV)
— Southwest Gas Holdings Inc. (SWX)
— Fox Corp. (FOXA)
— Mattel Inc. (MAT)
— Arco Platform Ltd. (ARCE)
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7 Stocks to Buy Near 52-Week Lows originally appeared on usnews.com
Update 11/14/22: This story was published at an earlier date and has been updated with new information.
