First of all, I want to wish the entire Real Money community a Happy Thanksgiving. May you have a long, relaxing and enjoyable holiday weekend spent with friends and family. While turkey is my least favorite meat, Turkey Day always has been one of my favorite holidays. I look forward to celebrating the day with copious amounts of food and good company along with a beatdown delivered by my Dallas Cowboys to our rival New York Giants this Thanksgiving.
There has been no shortage of turkeys within investors' portfolios this year as the markets have been more difficult to navigate than Lake Michigan during a squall for most of 2022. Here are a few of my turkeys that I hope can transform into game hens by the holiday next year.
Let's start with American Woodmark (AMWD) , which has been on a nice little run of late after holding support just above $40. That said, the shares of this cabinet maker are still down 15% for the year. The sector has been punished as interest rates have waylaid housing activity. However, American Woodmark beat both top- and bottom-line expectations when it reported third-quarter results Tuesday. While I expect the housing sector to continue to struggle until mortgage rates top out, the stock is reasonably priced at 8x earnings. The stock also happens to be a favorite of Real Money Pro columnist Paul Price.
OneMain Holdings (OMF) is another name that has started to behave better in recent weeks, although the shares are down nearly 25% so far in 2022 before accounting for the company's significant dividend payouts. Worries about credit quality have hurt this largely unsecured lender to middle- and working-class households. This is a legitimate concern as the economy looks destined to go into a recession sometime in 2023 and as the U.S. consumer has lost about 6% of their buying power to inflation since the start of 2021. That said, OneMain is well-reserved and the stock trades just above 5x earnings and yields nearly 10% at current trading levels.
Finally, we have Aurinia Pharmaceuticals (AUPH) , which has been an absolute buzzard here in 2022. This biopharma concern has lost about 75% of its value over the year. Sales of its recently approved lupus nephritis therapy Lupkynis have been under expectations and Aurinia is bleeding cash. However, slow marketing rollouts in this space are hardly a rarity.
In addition, Lupkynis was approved in Europe late this summer. This triggered a $30 million regulatory milestone payout from Auinia's marketing partner for that region and should help boost sales going forward. Aurinia has been the target of much buyout speculation in 2022, which has been smoke to this point. However, with a market cap of about $650 million and $400 million of net cash on the balance sheet as of the end of October, this seems too logical of a buyout to not have a high probability of happening in 2023.
