Breakout

Buy the dips: 3 laggards that are set to stage a comeback

Breakout

Buy the dips: 3 laggards that are set to stage a comeback

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Buy the dips: 3 laggards that are set to stage a comeback

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It’s been said that “one man’s trash is another man’s treasure,” and nowhere is this more evident than on Wall Street, where changing fortunes - and tastes -  can turn winners into losers faster than you can say "downgrade to sell."

“The big problem in value plays is; ‘When is the value going to get recognized?’” asks Jim Jubak, senior markets editor at MoneyShow.com, in the attached video. “You’re looking for a catalyst.” By that he means something that’s going to get investors to move a stock from the loser pile to the winner’s list.

As we discuss in the attached video, MoneyShow.com has asked their team of experts for stock picks that underperformed in 2013 and are poised to break out in 2014. Here is a small selection of their favorites:

AGL Energy (AGLNY)

Sydney-based utility, AGL Energy, is one such idea that Jubak says is poised to shine after getting dragged down with a struggling Australian economy. After shedding about 15% last year, AGL looks as if it already may be working, as it shows off a 2.5% gain so far this year at a time when the benchmark indexes are lower. 

“You’re basically getting a play on the Australian economy and about a 6% dividend yield,” Jubak says.

Check out more on this pick from Moneyshow.com HERE.

Chemical & Mining Co. of Chile (SQM)

Chilean mining concern SQM is another battered pick, having been cut in half over the past year as commodities AND emerging markets both slumped.

“They have about 40% global market share in lithium,” he says, “and they got pounded because the other half of their business is fertilizer,” he says.  

To be sure SQM is not well liked with Yahoo Finance data showing 9 out of 12 analysts who follow the stock currently rate it hold or underperform.  

Similar to Jubak’s Australian pick, SQM also pays a fat dividend that’s risen to 4.7% thanks to its slumping share price, just to help keep things interesting.

Check out more on this pick from Moneyshow.com HERE.

Light In The Box (LITB)

The Money Show's final value pick is based in Bejing but sells most of its online merchandise to customers outside of China. After pricing its IPO at $9.50 last June, Light In The Box (LITB)  soared 140% in its first two months but has been falling and lagging every since.

While LITB has to compete against much larger and better funded Chinese rivals such as Alibaba, Jubak thinks it only needs to win a sliver of its sales in order to thrive.

‘It’s an incredibly intense space but on the other hand, there’s incredible growth there,” he says.

At last check, Light In The Box was trading just beneath it’s IPO price again, giving it a market cap of only $450 million.

Check out more on this pick from Moneyshow.com HERE.

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