A lot of solid stocks have been beaten silly on excessive fear.
However, as we learned from successful investors, that fear may be an opportunity. Sir John Templeton taught us to buy excessive pessimism, for example.
Warren Buffett says that a “climate of fear is your friend when investing; a euphoric world is your enemy.” Even Baron Rothschild once told investors, “The time to buy is when there’s blood in the streets, even if the blood is your own.”
So which stocks are overdue for a comeback? Here are three.
Albemarle Corp. (ALB)
Albemarle is a lithium stock that’s benefiting from a severe supply-demand imbalance, as electric vehicle sales accelerate. Two, the ALB stock is technically oversold at double bottom support. From a current price of $256.61, we’d like to see ALB again challenge $310 a share.
Three, ALB just received $150 million from the U.S. Energy Department. It’ll be used to help build Albemarle’s lithium concentrator at its Kings Mountain mine. As noted by Barron’s, “Currently, most lithium is mined in Chile and Australia and converted into usable products in China. With EV sales in the U.S. rising, the Biden administration and the U.S. auto industry want to produce more EV materials domestically.”
Advanced Micro Devices (AMD)
AMD is ridiculously oversold on RSI, MACD, and Williams’ %R. and is overdue for a comeback.
Analysts at Cowen have a $100 price target on the stock, noting, “Chip stocks are near all-time low valuations after their big drops this year. While macro concerns abound—including a slowdown for computer and smartphones sales, rising inflation and hawkish central banks—he is bullish long term on chip demand on the back of the growing end markets in data centers, high-end smartphones, and 5G infrastructure.”
With the holiday season quickly approaching, watch Amazon.com (AMZN).
Severely oversold, we’d like to see the stock again challenge $140, near-term. Of course, that also depends on the strength of holiday shopping, which could take a slight hit with inflation.
However, according to the National Retail Federation: “Many consumers plan to prioritize holiday gifts and celebrations even if it means cutting back in other areas or shopping early. An NRF survey of 2,000 consumers conducted in late September found that 62% of holiday shoppers agree that it is important to spend on holiday gifts and celebrations. And they will do what they need to, even cutting back in other areas, so their loved ones can celebrate like they always do.”