• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

This Dirty Dozen of Beaten-Down Stocks Continues Its Collective Comeback

A rising market obviously doesn't hurt these issues that were hammered in 2018, but most also are outperforming a couple key market indices.
By JONATHAN HELLER
Mar 04, 2019 | 10:30 AM EST
Stocks quotes in this article: KHC, WGO, UNFI, GIS, BBBY, KRO, GRPN, SKX, BCC, MEI, PETS

Nearly three months since inception, my 2018 tax-loss-selling rebound exercise continues to provide compelling results. The objective, as in past years, was to identify names that had been hammered during the year and might be further sold off late in the year in order to offset gains, potentially setting them up for a rebound in the New Year. Of course, it helps to be in a rising market environment.

Besides being punished, qualifiers also had to exhibit some level of cheapness and meet the following criteria:

  • Down at least 30% year to date
  • Forward price-to-earnings (P/E) ratios below 15 in the next two fiscal years
  • Minimum market cap of $100 million

The resulting list was whittled down from 200 to 12 and released in three tranches of four names each in mid-December. Since my second update, results have improved, despite one major name, Kraft Heinz Co. (KHC) , that was obliterated after releasing fourth-quarter results. So far, all but one of the 12 is in positive territory and they are up an average of about 19.5%.

Tranche 1, released last Dec. 10, is somewhat surprisingly still in positive territory, up about 8.5%; that's better than the S&P 500 (up 6.1%) and just ahead of the Russell 2000 (up 8%). Kraft Heinz, now down about 33%, is weighing on performance, but has been supplanted by the uptick in Winnebago Industries Inc. (WGO) (up 43%). United Natural Foods Inc. (UNFI) is showing signs of life since the last update and has broken into positive return territory. General Mills Inc. (GIS) is also doing very well so far (up 23%).

Tranche 2, released last Dec. 12, is up 20% on average -- again better than the S&P 500 (up 6%) and Russell 2000 (up 10.5%). Bed Bath & Beyond Inc. (BBBY) has come alive (up 35%), as has Kronos Worldwide Inc. (KRO) (up 34%). The latter recently increased its quarterly dividend 6% to 18 cents a share and now yields 4.7%. Groupon Inc. (GRPN) has given some back since the last update but is still up about 10% since inception.

Tranche 3, released on Dec. 14, is up an average of 22%, also well ahead the S&P 500 (up 5.5%) and Russell 2000 (up 9.6%).The big winner so far is Skechers USA Inc. (SKX) (up 45%), the beneficiary of better-than-expected fourth-quarter results that gave shares a 15% boost the day after the announcement. Boise Cascade (BCC) is holding on to earlier gains (up 18%). Methode Electronics Inc. (MEI) (up 22%) has picked up the pace over the past month, while PetMed Express Inc. (PETS) (up 3.6%) remains just modestly positive so far.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Heller had no positions in the stocks mentioned.

TAGS: Fundamental Analysis | Investing | Stocks | Value Investing | Apparel | Consumer | Food & Staples Retail | Pets | Technology | Consumer Staples | E-Commerce | Paper/Forest Products | Real Money | Consumer Discretionary

More from Stocks

Stitch Fix Is a Short-Term Buy on This Breakout

Ed Ponsi
Dec 10, 2019 8:30 AM EST

The chart and the massive short position say now is the time to shop for SFIX.

Institutional Selling, FOMC Meeting, Adobe and MongoDB: Market Recon

Stephen Guilfoyle
Dec 10, 2019 7:56 AM EST

Judging corporate performance into the fourth quarter, sectors to watch and charting these 2 stocks.

The Waiting Game

James "Rev Shark" DePorre
Dec 10, 2019 7:54 AM EST

The waiting isn't much fun but there will be great trading opportunities when news on the tariffs finally hits.

This Airline Stock Is Flying Under the Radar

Paul Price
Dec 10, 2019 7:00 AM EST

Here's how to get on on board JetBlue.

Sigh a Breadth of Relief: Key Market Indicator Continues to Improve

Helene Meisler
Dec 10, 2019 6:00 AM EST

The S&P 500 dipped and breadth on the NYSE stayed -- barely -- positive, but here's the catch: The McClellan Summation Index just won't turn up.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:02 AM EST BOB LANG

    Added Some Peleton

    This stock is starting to gain some traction, the ...
  • 01:06 PM EST CAROLYN BORODEN

    MRK and LVS Targets Coming Up

    View Chart » View in New Window »  LVS View C...
  • 12:01 PM EST BOB LANG

    Rolling Up Apple

    Just the other day we added some Apple calls on th...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2019 TheStreet, Inc., 14 Wall Street, 15th Fl, NY, NY 10005

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login