Tags: Beleaguered | stocks | potential | gains

USA Today: 8 Beleaguered Stocks With Potential for Gains

By Dan Weil   |   Thursday, 14 Aug 2014 08:41 PM

If you're a value investor, you're looking for damaged stocks that have a good chance to rebound. USA Today put together a list of eight such stocks.

They are the only eight in the S&P 1500 Composite Index, which includes small-, medium- and large cap shares, that meet the following requirements:

  • They have dropped at least 20 percent this year.
  • They receive an average rating of "outperform" from Wall Street analysts.
  • They receive at least a "buy" rating from S&P Capital IQ.
  • They receive at least a "neutral" rating from New Constructs.
  • They are at least 10 percent short of analysts' 18-month price targets.
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New Constructs rates stocks based on how fairly priced they are relative to the present value of expected future cash flows.

The eight stocks are Avon Products, CommVault Systems, Domtar, Fossil Group, Informatica, Inter Parfums, Ryland Group and Vitamin Shoppe. 
 
As for Avon, Morningstar analyst Erin Lash gives a mixed view of the company. "We've been encouraged by the actions Avon's new management group has taken to close the book on past issues, but obstacles remain," she writes on Morningstar.com.
 
"We think investments in technology, infrastructure, supply chain, and rightsizing the portfolio are needed to put Avon on more solid ground. However, the global beauty-care firm's fortunes won't reverse overnight."
 
Lash has a fair value estimate of $17 for Avon shares, which closed Thursday at $13.71.

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