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Philip van Doorn

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Dec. 28, 2019, 8:52 a.m. EST

These 10 S&P 500 stocks were lousy in 2019, but they could return 40% or more in 2020

There’s a tendency for one year’s dogs to recover the following year

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By Philip van Doorn, MarketWatch


American Airlines
Shares of American Airlines are down 12% this year, but analysts expect a 31% rally for the stock over the next 12 months.

This has been an excellent year for U.S. stocks — so good, in fact, that among the S&P 500, only 57 have had negative returns. But it may be profitable to look among the losers for bargains.

Mark Hulbert recently pointed to a trend among stocks in the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.78%  for one year’s worst performer tends to perform very well the following year. (Of course, he also warned that there have been exceptions to the trend.)

Looking at the year’s 57 losers among the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.05% , 23 are down 10% or more (including reinvested dividends). Of course, a 10% drop for the best of this group may not seem like terrible performance, as stock prices are volatile. But it looks particularly bad when you consider that the S&P 500 has returned 30% this year through Dec. 18.

Among the 23 stocks, 10 have majority “buy” or equivalent ratings among the Wall Street sell-side analysts polled by FactSet. Here they are:

Company Ticker Total return - 2019 through Dec. 18 Share 'buy' ratings Share neutral ratings Share 'sell' ratings Closing price - Dec. 17 Consensus price target Implied 12-month upside potential
Concho Resources Inc. /zigman2/quotes/208942254/composite CXO -21% 79% 18% 3% $81.12 $100.79 24%
DuPont de Nemours Inc. /zigman2/quotes/203606582/composite DD -14% 75% 25% 0% $63.91 $80.29 26%
Mosaic Company /zigman2/quotes/203825795/composite MOS -28% 65% 30% 5% $18.22 $25.84 42%
Nielsen Holdings PLC /zigman2/quotes/204674663/composite NLSN -11% 64% 29% 7% $19.88 $25.21 27%
Cabot Oil & Gas Corp. /zigman2/quotes/205804016/composite COG -23% 63% 30% 7% $16.85 $21.83 30%
Cimarex Energy Co. /zigman2/quotes/205517948/composite XEC -17% 62% 38% 0% $50.66 $63.73 26%
Mylan N.V. /zigman2/quotes/209413137/composite MYL -31% 59% 41% 0% $18.81 $25.73 37%
Abiomed Inc. /zigman2/quotes/202106417/composite ABMD -46% 56% 44% 0% $178.87 $238.00 33%
Alliance Data Systems Corp. /zigman2/quotes/205162001/composite ADS -25% 53% 47% 0% $110.45 $126.24 14%
American Airlines Group Inc. /zigman2/quotes/209207041/composite AAL -12% 53% 33% 14% $28.00 $36.72 31%
 Source: FactSet

You can click the tickers for more about each company.

Based on the 12-month price targets, the analysts expect double-digit gains for the entire group.

If you are interested in any of the stocks on the list, do your own research before investing to determine your own comfort with the company’s strategy and prospects.

Here are other stock lists looking ahead to 2020 or back over 2019 and the past decade:

• Here are Wall Street’s favorite stocks for an oil-sector recovery in 2020

• These are Wall Street’s top dividend stock picks for 2020

• Top stock picks for 2020: The best of the biggest

• Top stock picks for 2020: Making money with midsize firms

• Top stock picks for 2020: Standout small companies

• Here’s how Wall Street’s favorite stock picks turned out in 2019

• These are the 20 best-performing stocks of the past decade, and some of them will surprise you

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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
28,992.41
-227.57 -0.78%
Volume: 313.44M
Feb. 21, 2020 5:16p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,337.75
-35.48 -1.05%
Volume: 2.12B
Feb. 21, 2020 5:16p
loading...
/zigman2/quotes/208942254/composite
US : U.S.: NYSE
$ 79.38
-1.96 -2.41%
Volume: 2.13M
Feb. 21, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
1.01%
Market Cap
$15.61 billion
Rev. per Employee
$2.76M
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/zigman2/quotes/203606582/composite
US : U.S.: NYSE
$ 52.43
-0.12 -0.23%
Volume: 4.03M
Feb. 21, 2020 6:30p
P/E Ratio
79.15
Dividend Yield
N/A
Market Cap
$38.77 billion
Rev. per Employee
$877,316
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/zigman2/quotes/203825795/composite
US : U.S.: NYSE
$ 19.19
+0.72 +3.90%
Volume: 10.29M
Feb. 21, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
1.04%
Market Cap
$7.27 billion
Rev. per Employee
$743,201
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/zigman2/quotes/204674663/composite
US : U.S.: NYSE
$ 21.85
-0.40 -1.80%
Volume: 5.21M
Feb. 21, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
1.10%
Market Cap
$7.77 billion
Rev. per Employee
$141,630
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/zigman2/quotes/205804016/composite
US : U.S.: NYSE
$ 14.89
-0.46 -3.00%
Volume: 10.08M
Feb. 21, 2020 6:30p
P/E Ratio
7.83
Dividend Yield
2.69%
Market Cap
$6.07 billion
Rev. per Employee
$7.07M
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/zigman2/quotes/205517948/composite
US : U.S.: NYSE
$ 42.49
-0.81 -1.87%
Volume: 2.16M
Feb. 21, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
2.07%
Market Cap
$4.33 billion
Rev. per Employee
$2.45M
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/zigman2/quotes/209413137/composite
US : U.S.: Nasdaq
$ 21.15
+0.23 +1.08%
Volume: 4.94M
Feb. 21, 2020 4:00p
P/E Ratio
241.16
Dividend Yield
N/A
Market Cap
$10.92 billion
Rev. per Employee
$326,506
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/zigman2/quotes/202106417/composite
US : U.S.: Nasdaq
$ 166.74
-1.34 -0.80%
Volume: 458,662
Feb. 21, 2020 4:00p
P/E Ratio
31.28
Dividend Yield
N/A
Market Cap
$7.51 billion
Rev. per Employee
$644,608
loading...
/zigman2/quotes/205162001/composite
US : U.S.: NYSE
$ 102.16
-0.90 -0.87%
Volume: 503,662
Feb. 21, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
2.47%
Market Cap
$4.71 billion
Rev. per Employee
$389,560
loading...
/zigman2/quotes/209207041/composite
US : U.S.: Nasdaq
$ 27.82
-0.69 -2.42%
Volume: 11.26M
Feb. 21, 2020 4:00p
P/E Ratio
7.30
Dividend Yield
1.44%
Market Cap
$11.85 billion
Rev. per Employee
$345,547
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Philip van Doorn covers various investment and industry topics. He has previously worked as a senior analyst at TheStreet.com. He also has experience in community banking and as a credit analyst at the Federal Home Loan Bank of New York.

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