The last few months, with the exception of a few short bullish trading runs, have been brutal for the stock market. NASDAQ has already entered the beer-market zone, with a loss of% 26% so far this year, and near the S&P 500 edge, with a year-to-date loss of ~ 17%.
But investors should keep in mind: even in a bear market, there are opportunities to be risk-friendly. This leads us to over-sold stocks, and the possibility of them returning to the benefit of investors.
Over-selling stocks are victims of the situation, stocks with good foundations that are caught in the over-reaction of the market, or driven by external economic factors. Investors should look for opportunities in today’s market situation.
With that in mind, we’ve scoured the TipRanks database and chosen two names that have recently moved south, especially those flagged by those who are known to sell more. Significant reverse possibilities are not mentioned here in the table. Let’s take a closer look.
Hearright Holdings (HRT)
We will start in the world of human resources. Every company relies on it, it effectively provides an infinite market. Hireright Holdings provides solutions for risk management, compliance and background screening for new hires and boasts more than 40,000 enterprise customers worldwide. Last year, the company operated more than 110 million such screens in 29 million reports.
Hairwright operates as a holding company, and earlier this month its affiliate, Backgroundchecks.com, expanded its services to provide background screening in the transportation sector. Focusing on small and medium-sized motor carriers, the subsidiary will provide competitive pricing for strong checks required to comply with federal-level transportation department regulations.
Also this month, HireRight posted Q1 earnings year-over-year growth of 33%, topping 198.7 million. Operating income increased further, from $ 5.7 million to $ 20 million. And, the company’s net income showed similarly impressive profits; y / y, mixed EPS increased from 12 cents to 37 cents.
All of this comes down to a company that was only public this past fall. Hearwright held its IPO in October last year, at an event that fell short of expectations. The stock had an initial price of $ 19 per share, in contrast to the proposed range of $ 21 to $ 24, although HireRight raised more than 1 421 million from the sale of 22.2 million shares.
Despite strong earnings results since then, the company’s stock has fallen 23% this month, falling into a general market downturn. However, Credit Suisse analyst Kevin McVee thinks the stock has enough ups and downs.
“We expect HRT stocks to continue recovering from its highly oversold position due to an impressive Q1A beat + extended FY22E guide … The current stock price creates a compelling opportunity for investors to gain exposure to a leading global provider of technology-driven workforce risk. Management + Consent Solutions. In our view, the current valuation is much more bearish due to the margin option compared to peers in the -10 5-10% organic growth that offers continued investment in automation and long-term models, “McVeigh wrote.
Surprisingly, McVeigh gives HRT an outperform (i.e. buy) rating and its $ 21 price target indicates a 58% uptick for next year. (To view MacVeigh’s track record, Click here)
This exaggerated view of HRT is quite mainstream, as indicated by the 6 to 1 split that supports buy reviews on holdes for a strong buy analyst consensus on shares. The average price target of .8 21.86 indicates a ~ 65% increase from the current trading price of $ 13.28. (See HRT Stock Forecast at TipRanks)
Copa Holdings (CPA)
The next oversold stock we see are Copa Holdings, the Panama-based Copa Airlines and the parent company of the Colombian domestic carrier Copa Colombia. The airline industry was hit hard by the Corona epidemic and its travel disruptions, but it has been recovering since it sank in early 2020. Copa, which offers about 200 daily scheduled flights to more than 80 destinations in Central America. The Caribbean, South America and North America are well located to benefit from the increase in tourist travel.
Copa boasts 91.3% on-time performance for its flight operations, and completes 99.3% of all scheduled flights; These are the strong metrics that place Copa as one of the leaders in the industry.
Copa reported total revenues of $ 571.6 million in 1Q22. This is far from the epidemic-depressing $ 185.7 million reported in 1Q21. Compared to the last pre-epidemic quarter, 1Q19, Cooper’s revenue fell 4%. This result includes passenger revenue, which remains at 83% of the 1Q19 level. The company’s available seat miles (RASM), a key industry metric, was 10.2 cents at 1Q22, still 3% lower than at 1Q19.
On the balance sheet, Copa had $ 1.2 billion in cash and other liquid assets to end the first quarter, as opposed to a total of $ 1.6 billion in debt. The company boasts a strong fleet of Boeing aircraft, a total of 93 aircraft. This number includes 3 737-700 storage facilities and a 737-800 air freight, with 89 aircraft available to carry passengers. This compares with the 102 planes operating before the epidemic.
Copa shares fell 13% last month, and are trading near a 12-month low. According to seaport analyst Daniel McKenzie, the shares are now ‘oversold’ and detached from fundamentals.
“The results for the first quarter were better than expected. Looking ahead, we are modeling the better edge of the 3-5% operating margin guide of CPA for 2Q based on the underlying demand strength. We also conclude that 2Q could easily be another blueprint quarterly for paint-up demand in the United States (from PTY) if the U.S. decides to simplify 24-hour covid test requirements (currently reducing international demand), ”Mackenzie commented.
“Net / Net, we’re moving away from the CPA’s 1Q22 earnings release, concluding that the airline has a great recovery story behind a ULCC cost structure, premium revenue potential and an initial competitive dynamic that is behind CPA’s industry-leading gains,” the analyst said. Added
In line with this bullish outlook, McKenzie shares a purchase CPA with a target price of $ 108, which means a one-year uptrend of 58%. (To view McKenzie’s track record, Click here)
Overall, COPA’s Strong By Consensus rating is supported by 5 recent analyst reviews, including 4 by and 1 hold. The stock is selling at $ 68.37 and their মূল্য 104.20 average price target suggests a% 52% uptrend this year. (See CPA Stock Forecast at TipRanks)
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Disclaimer: The views expressed in this article are those of the featured analysts only. Content is intended for informational purposes only. It is very important to do your own analysis before making any investment.