Stocks continue to recover from the harrowing losses of late December, pushing the Dow Jones Industrial Average back over the 23,000 mark in early trading on Monday, which is setting up a run at the 50-day moving average.
It has helped that Federal Reserve chairman Jerome Powell has quickly changed his tune in recent days, sounding a dovish note during a panel with former chairmen Ben Bernanke and Janet Yellen. It remains all about the Fed. And for traders, seeing Powell next to those familiar faces reinforced the notion of a “Fed put” and revived animal spirits.
Sure, corporate earnings growth is set to slow. The U.S.-China trade spat is ongoing. Parts of the U.S. government remain closed. And manufacturing activity globally is slowing. But for now, folks are focusing on turnaround plays.
Here are five turnaround stocks to buy:
General Electric (GE)
General Electric (NYSE:GE) stock was left for dead as management turnover, a tepid restructuring plan and a poorly timed focus on the energy business gutted sentiment. Shares suffered a 75%+ decline from their late 2016 high into the lows set last month. But since then, value hunters have swooped in on GE stock, resulting in a nice 27% rise off of bottom thanks to reports of a possible sale of its jet leasing unit.
The company will next report results on Jan. 31, before the bell. Analysts are looking for earnings of 18 cents per share on revenues of $32 billion. When the company last reported on Oct. 30, earnings of 14 cents per share missed estimates by 6 cents on a 3.6% drop in revenues.
After losing nearly half of its value from its June high, as investors bailed out of the “FAANG” component and onetime momentum high-flier, Netflix (NASDAQ:NFLX) stock is putting together a nice oversold rebound rally. Already up 34% from its December low, NFLX stock is closing in on its 200-day moving average thanks in part to the addition of the stock to Goldman Sachs’ Conviction Buy List.
The company will next report results on Jan. 17 after the close. Analysts are looking for earnings of 26 cents per share on revenues of $4.2 billion. When the company last reported on Oct. 16, earnings of 89 cents per share beat estimates by 21 cents on a 34% rise in revenues.
General Motors (GM)
General Motors (NYSE:GM) stock is bouncing off of a “higher low” base of support to challenge its upward rising 50-day moving average. A “Golden Cross” looks likely on hopes of thawing trade tensions and easing auto import tariffs with partners such as China. GM stock also enjoyed an upgrade from analysts at BMO Capital Markets today.
The company will next report results on Jan. 30 before the bell. Analysts are looking for earnings of $1.19 per share on revenues of $36.6 billion. When the company last reported on Oct. 31, earnings of $1.87 per share beat estimates by 62 cents on a 6.4% rise in revenue.
Square (NYSE:SQ) stock is once again attempting a upward breakout from its four-month downtrend pattern. This is resulting in a buy signal on SQ stock from the parabolic stop-and-reverse indicator. This is the first significant pullback for what has been a consistent winner, with shares up 7x from late 2016 levels. Shares were recently upgraded by analysts at Wolfe Research.
The company will next report results on Feb. 6 after the close. Analysts are looking for earnings of a loss of 2 cents per share on revenues of $910.6 million. When the company last reported on Nov. 7, earnings of 13 cents per share beat estimates by 2 cents on a 67.7% rise in revenues.
American Airlines (AAL)
American Airlines (NASDAQ:AAL) stock is rebounding off of support from its October low, setting up another run at overhead resistance near the $40-per-share level. Sentiment was dinged last week after competitor Delta (NYSE:DAL) lowered Q4 revenue guidance, but demand remains strong and lower fuel costs provide a margin tailwind for AAL stock.
The company will next report results on Jan. 24 before the bell. Analysts are looking for earnings of $1.1 per share on revenues of $11.1 billion. When the company last reported on Oct. 25, earnings of $1.13 matched expectations on a 5.4% rise in revenues.
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