Despite a huge rally off the March bottom that has seen the U.S. indexes hit all-time highs, shares of many of the top companies that investors are very familiar with have taken a beating. The ones that have been beaten down the most are in sectors that are struggling the most with the temporary new normal rules that are still in place to varying degrees around the country.
We screened our 24/7 Wall St. research database looking for well-known companies that are likely to survive the current troubles and could very well offer patient investors some huge returns over the next year or so. Patient investors that did that in 2008 and 2009 absolutely killed it over the next few years.
Five top stocks made the cut, and all are rated Buy now by top Wall Street firms. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Ford
This remains a solid value play now, and demand could jump when the coronavirus issues have passed. Ford Motor Co. (NYSE: F) is one of the world’s largest vehicle producers, with over 6 million units manufactured and sold globally. The company has made significant progress executing on its One Ford plan and delivering best-in-class vehicles.
Ford is among the car brands with the most loyal customers, and it remains committed to positioning itself well within the evolving auto industry through balanced investments across electrification, autonomy and mobility services.
In the spring, Ford sold $8 billion of unsecured bonds in three parts. The longest maturity, a 10-year security, will yield 9.625%, after initially being marketed around 11%, according to a person with knowledge of the matter. It is the company’s first debt offering since losing its investment-grade ratings on March 25, becoming the largest fallen angel of the current downgrade cycle.
BofA Securities has a $9 price target on the venerable car company. The Wall Street consensus target is $7.66, and Ford stock has traded mostly below $7 for the past month.
General Electric
If any stock has taken a beating over the past three years, it has been this legendary corporation. General Electric Co. (NYSE: GE) businesses are organized broadly under seven segments: Power, Renewable Energy, Energy Connections, Oil & Gas, Aviation, Healthcare, Transportation and GE Capital. The company’s products and services include power generation equipment, aircraft engines, locomotives, medical equipment, compressors and others. Over half of the business is tied to service and aftermarket support.
In 2018, the venerable American industrial giant got the ultimate humiliation of being removed from the Dow Jones industrial average after a stay of over 100 years. General Electric is still one of the most valuable brands in the world.
The massive restructuring and debt reduction plans that have been announced come after years of acquisitions and changes in the core business at GE, and in some cases what many on Wall Street thought were ill-advised moves by the former CEO Jeff Immelt. The company’s once dependable dividend has been chopped to $0.04 a share and may be eliminated altogether at some point.
Investors receive just a 0.65% dividend. The BofA Securities price target is $11, and the consensus target is $7.75. General Electric stock dipped below $6 a share on Friday.
GoPro
The takeover chatter around this company has become incessant. GoPro Inc. (NASDAQ: GPRO) develops and sells cameras, drones and mountable and wearable accessories in the United States and internationally.
The company offers the following:
- HERO7, a cloud-connected line of cameras
- Fusion, a waterproof spherical camera
- GoPro Plus, a cloud-based storage solution that enables subscribers to access, edit and share content
- Quik, a mobile editing app, as well as desktop app for editing options for power users
- GoPro App, a mobile app that allows users to preview and play back photos and videos, control GoPro cameras and share content
- Karma Grip, a handheld or body-mountable camera stabilizer that capture zero-shake smooth video
GoPro also offers customers mounts and accessories, such as equipment-based mounts for the helmet, handlebar and roll bar and tripod mounts that enable consumers to wear the mount on their bodies, such as wrist housings, chest harnesses and head straps. GoPro markets and sells its products through retailers and wholesale distributors, as well as through its website.
The $7 Oppenheimer price target is well above the $4.83 consensus target. GoPro stock slipped below $4 last week.
Hewlett Packard Enterprises
Shares of this spin-off from a Silicon Valley legend hold solid upside potential. Hewlett Packard Enterprise Co. (NYSE: HPE) consists of these four segments:
- Hybrid IT (provides servers, storage, data center networking and Pointnext brand services)
- Intelligent Edge (enterprise networking and connectivity for campus and branch environments, operating under the Aruba brand)
- Financial Services (enables flexible IT consumption models)
- Corporate Investments (including HP labs and business incubation projects)
Last month, the company delivered a strong beat on the top and bottom lines due to strong execution on backlog and improving demand. BofA Securities views reinstatement of guidance as a net positive, indicating better visibility and improving trends. The stock remains inexpensive relative to peers.
BofA Securities has set a large $15 price target on Hewlett Packard Enterprises stock. The consensus target is $11.26, and shares have traded mostly between $9 and $10 since June.
24/7 Wall St.Zynga
This very aggressive tech play could have upside above the Morgan Stanley target. Zynga Inc. (NASDAQ: ZNGA) is a leading developer of mobile and social games. In the company’s relatively short history, it has developed a broad portfolio of games that includes several on Facebook and several top-grossing mobile apps. Key franchises include FarmVille, Zynga Poker, Hit It Rich Slots and Words With Friends.
Snap announced last year that it was expanding its partnership with Zynga to release new titles on Snap’s gaming platform. The partnership may expand Zynga’s reach to a younger demographic, though the near-term revenue opportunity is likely not impactful to Zynga. Content investment commitment from Zynga an indication of strong engagement and a very solid long-term opportunity.
Morgan Stanley’s $11.50 price target is just below the $11.61 consensus target. Zynga stock traded below the $9 level recently.
Most investors are familiar with these companies, and shares of all five have been sent to the single-digit midget penalty box. Some of these companies may have a difficult road back to prosperity, but given what we have seen in the past, and the massive liquidity Washington, D.C., has provided, the odds are good that each survives this downtown.
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