Skip to main content

Back to School - Time for beaten down Stocks!

I went into summer hibernation from updating my blog. After Modi's spectacular win, I could not find interesting enough topic for me to come out my hibernation and write about it.
Finally now kids are back in school, summer trips are over, it's time for me to get into blog-writing mode. Yesterday I started auditing course at Haas School of Business, UC Berkeley (along with my friend). That is also motivation for me to write my blog which I started during my MBA days.
Markets are all time high. Nasdaq is within teen percentage of all time high and it's just matter of time (most likely in early part of 2015) when Nasdaq would break it's all time record. So in such exuberant markets, what should an investor do? Go with the flow and invest in markets, sell all holdings and sit tight in cash (which may not be a bad decision given historically scary months of Sept/Oct) or pick-n-choose your stock selections.
I am leaning towards 3rd option. While in long-run, efficient market theory work, in short-run, behaviors of individuals (and markets which are made of we all irrational people) play much strong role. This is where stock-picking opportunities would come. I won't claim I am good at it but I could make an attempt. After all one has to make his/her own decisions while investing real money. With that in mind, today's theme is "beaten down" stocks due to various factors. These companies got hammered due to change in strategy (Sprint - S) , investments going bad (Portugal Telecom - PT) or market factors (VIP). But as long as these companies survive, there is strong chance that these investments could return between 25 to 50% by Dec 2015. Here are 10 such stocks and prices at which they could make good entry points:

  1. Sprint (S): $5 to $5.50
  2. Portugal Telecom (PT): $1.70 to $1.90
  3. Vimpelcom (VIP): $8.40 to $8.80
  4. Covisiant (COVS): $4.40 to $4.90
  5. Rite-aid (RAD): $6 to  $6.50
  6. Bank of America (BAC): $15.5 to $16
  7. Alcatel (ALU): $3.20 to $3.30
  8. National Bank of Greece (NBG): $3.30 to $3.40
  9. Jive Software (JIVE): $6.90
  10. RenaSola (SOL: $2.60
Many of these are high-beta stocks so you need to be careful while investing. However if you do your own research and come to conclusion that these companies would survive (using common sense approach), you could possibly make investments and sell covered calls every quarter which are 10-20% above stock price. Regarding details about covered-calls, you can check out my previous post 
Hope you had great summer!
/Shyam

Comments

Post a Comment

Popular posts from this blog

Clicks to Tokens: Will 2026 Echo 1998's Boom or 2000's Bust?

My "blogging" was in hibernation last 8 months due to my self-imposed restraint given the environment as well as built-in inertia to get started despite so many interesting events and markets reaching all time highs after taking a big dump around "Liberation Day" in Apr...Around that time I had the blog ready that it would be repeat of Mar/Apr 2020 panic and recovery during onset of Covid Pandemic. The hunch happened to be correct and I was glad that I could keep and take some positions which I am still holding especially around AI theme. But that was then...as 2025 is about to wrap up in 10+ weeks, let's look at what's in store for rest of 2025 and 2026. And what's better time than to start writing again just before one of the most important week on the calendar with multiple key events coming up next week... Fed meeting to decide the course of interest rates - it's almost guaranteed that Fed will cut rates by 25 basis points (2nd time in 2025) and...
Post a Comment
Read more

2026: The Year of Convergence – Melt-up, Moonshots, or Mid-cycle Correction?

Happy New Year! After another period of self-imposed hibernation from the blog—partly due to the festivals, travel, intertia and partly to watch the dust settle on a chaotic 2025—I decided to use the quiet of this New Year’s morning to finally reboot.  Looking back at my October post,  “Clicks to Tokens,”  the hunch about the AI theme held firm. We spent much of 2025 debating whether we were in 1998 or 2000. As we enter 2026, the answer seems to be "neither and both." We have the roaring optimism of the 1920s fueled by "Silicon Spirits," but with the high-speed volatility of the 2020s. So, as the calendar flips, what is in store for 2026? Markets may experience melt-up (S&P touching 8000),  with some moonshots (like SpaceX and OpenAI) IPOs or even see mid-cycle correction bringing down S&P to 6000. That's a wide range and will be decided by Four R's... Here are my thoughts on the " Four R’s ":  Rates, Robots, Rotations, and Real Assets. 1. ...
Post a Comment
Read more

And the Oscar goes to...

It's Oscar Sunday and time for predictions for few categories - before I digress into talking about drama in DC or markets.  First of all, I want to recognize the damage LA fires have done to the beloved areas of Los Angeles and impacted families across all spectrums. My heart goes out to them and wish them recovery and rebuilding of their lives... This year's Oscar nominees and post nomination period had been interesting to say the least. Due to this, the field is wide open in almost all categories and that's what makes prediction game so interesting. Just to set expectations, I would consider a win if I get even 50% predictions correct given the dynamics of nominees this year. So here are my predictions - "And the Oscar goes to..." Best Picture - Anora (surprise could be "The Brutalist") Best Director - Sean Baker for "Anora" (Surprise could be Brady Corbet for "The Brutalist") Best Actor - Adrien Brody for "The Brutalist"...
Post a Comment
Read more