"And the last shall be first." - The Gospel of Matthew
Things may not have changed all that much since biblical times. Some of the biggest recent stock market winners were among last year’s worst performers. Four that were almost universally despised include Blackberry (BBRY, Financial) – formerly called Research In Motion – Best Buy (BBY, Financial), Radio Shack (RSH, Financial) and Hewlett Packard (HPQ, Financial). Some analysts went as far as suggesting that these companies might not even be around at all over the long term.
This is how you fared if you actually bought that unloved quartet exactly six months ago.
It would have taken a strong stomach to own the companies listed above. All the news looked bad and the risk appeared very high. They were all cheap for good reasons. Each provided a great trading opportunity that played out well within months.
Four far less troubled names may provide similar upside with much less fundamental downside than those "pigs" of 2012. Three of the four provide decent yields. Each trades for well off its 52-week high and at a low multiple.
There’s no doubt that this group will survive. All have solid profits and good prospects. Yes, even Staples. Who would have called Dell (DELL), Office Max (OMX) or Office Depot (ODP) as good candidates for LBO’s or mergers one year ago?
Chasing extended stocks with the broad market near all-time highs is a dicey proposition. Owning shares of quality companies at bargain prices seems much more rational. The meek may not inherit the earth, but these orphaned companies are likely to find good homes in value-oriented portfolios.
Disclosure: Long shares of SPLS, LTM, POT and DGX
Things may not have changed all that much since biblical times. Some of the biggest recent stock market winners were among last year’s worst performers. Four that were almost universally despised include Blackberry (BBRY, Financial) – formerly called Research In Motion – Best Buy (BBY, Financial), Radio Shack (RSH, Financial) and Hewlett Packard (HPQ, Financial). Some analysts went as far as suggesting that these companies might not even be around at all over the long term.
This is how you fared if you actually bought that unloved quartet exactly six months ago.
It would have taken a strong stomach to own the companies listed above. All the news looked bad and the risk appeared very high. They were all cheap for good reasons. Each provided a great trading opportunity that played out well within months.
Four far less troubled names may provide similar upside with much less fundamental downside than those "pigs" of 2012. Three of the four provide decent yields. Each trades for well off its 52-week high and at a low multiple.
There’s no doubt that this group will survive. All have solid profits and good prospects. Yes, even Staples. Who would have called Dell (DELL), Office Max (OMX) or Office Depot (ODP) as good candidates for LBO’s or mergers one year ago?
Chasing extended stocks with the broad market near all-time highs is a dicey proposition. Owning shares of quality companies at bargain prices seems much more rational. The meek may not inherit the earth, but these orphaned companies are likely to find good homes in value-oriented portfolios.
Disclosure: Long shares of SPLS, LTM, POT and DGX
