Unlocking Potential: Stocks Poised for a Comeback in 2025
As we approach the end of 2024, the stock market has begun to present some intriguing opportunities. While the S&P 500 and the Nasdaq Composite recently set new closing records, several stocks that have lagged this year may be ready to bounce back in the first quarter of 2025. According to insights from Goldman Sachs, the trends surrounding these "laggard" stocks could indicate lucrative investments waiting to be made.
The Overview: Laggard Stocks and Their Potential
Goldman Sachs has been closely monitoring underperforming stocks since 2002, establishing a compelling trend: in 13 out of the past years, these laggards have rebounded significantly. Currently, the underperformance of lagging stocks is evident, with an average year-to-date index-relative performance of -39%, which unfortunately is worse than the long-term average of -27%.
Analyst Deep Mehta emphasizes that sectors like Healthcare, Industrials, Technology, and Consumer Discretionary are the most represented among these laggards. Interestingly, these stocks often present a unique combination of slow financial returns while delivering on high growth potential.
Identifying the Laggards: Key Criteria
Goldman’s approach to identifying these laggards involves a robust screening method. Stocks are characterized as laggards if they meet at least two of the following criteria:
- They rank in the bottom third for full-year share price performance compared to all S&P 500 constituents.
- They rank in the bottom third for full-year share price performance against their Global Industry Classification Standard (GICS) sector peers.
- They fall into the bottom third for drawdowns from their annual high water mark compared to S&P 500 constituents.
By pinpointing these stocks, investors can find opportunities that others may overlook—particularly stocks with buy ratings that contradict the prevailing sentiment on Wall Street.
The Comeback Candidates
Here is a closer look at a few specific stocks Goldman Sachs believes are poised for recovery:
1. Conagra Brands (CAG)
Despite facing downward pressure recently—partly due to changes in administration and ensuing uncertainty regarding FDA reforms—Conagra presents an enticing opportunity. With Goldman holding a buy rating and estimating a potential upside of around 30%, there is significant room for recovery. Currently, most analysts are neutral at best; 72% of the analysts covering Conagra rate it no higher than a hold. If you’re looking for a stock that might surprise the market in 2025, Conagra deserves a spot on your watchlist.
2. TripAdvisor (TRIP)
After experiencing a tumultuous year, with a staggering 33% decline, TripAdvisor has recently seen a minor uptick of nearly 3% over the last three months. Yet, it still trails behind with more than a 13% drop over the past month. Goldman sees a promising 70% upside potential based on its price target, positioning this online travel company as a hidden gem. With only 20% of analysts rating it a buy, this presents an opportunity for contrarian investors to consider.
3. Pool Corporation (POOL)
Although Pool Corporation has seen some recovery in recent months, it remains down nearly 6% so far this year. Goldman’s analysts suggest a 20% upside based on their 12-month price target, and they are part of the 33% of analysts who rate it as a buy. This could be an excellent opportunity for investors looking for a gradual rebound.
Why Choose Extreme Investor Network?
At Extreme Investor Network, we understand the complexities of navigating the stock market, particularly in uncertain times. Our commitment goes beyond the conventional market analysis—our team of experts is dedicated to equipping you with invaluable insights, actionable strategies, and a unique perspective that sets us apart.
By focusing on the underperforming stocks that analysts believe may have strong rebounds, we’re here to help you diversify your portfolio and make informed investment decisions.
As 2024 draws to a close, keep your eyes peeled on these laggards. With a strategic approach and the right insights, you can position yourself to capitalize on their potential rise in 2025.
Stay tuned for more expert analyses and market updates right here at Extreme Investor Network—your premier source for savvy investment strategies.
By adding unique insights and a compelling narrative, this blog post should attract readers seeking fresh perspectives on investment opportunities.