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These stocks are in bear-market territory, but Wall Street expects them to soar as much as 68%

By Philip van Doorn

More than 100 large-cap stocks are at least 20% below their 52-week highs. But analysts love Micron Technology, Activision Blizzard and JD.com, among others

This looks like another good year for the stock market -- the benchmark S&P 500 is up 16%. But it turns out that scores of stocks are in bear-market territory. And among that beaten-down group, there are many stocks that Wall Street analysts expect to roar back.

A list of those stocks is below.

The power of index weighting

The S&P 500 is having an excellent year, in part, because it is weighted by market capitalization. It turns out that among the 500 stocks, 96 are down this year and 99 are down at least 20% from their 52-week highs.

Now let's look at the top five companies held by the SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500. Together, they make up nearly 23% of the ETF's portfolio and the S&P 500 Index:

Company  Price change -- 2021  Share of SPY 
Apple Inc. AAPL  8.1%  6.1% 
Microsoft Corp. MSFT  32.5%  6.0% 
Amazon.com Inc. AMZN  2.7%  4.0% 
Facebook Inc. Class A FB  30.9%  2.3% 
Alphabet Inc. Class A GOOGL  58.7%  2.3% 
Alphabet Inc. Class C GOOGL  59.4%  2.1% 
Source: FactSet 

Beloved stocks in bear markets

To broaden a list of large-cap stocks, the following screen began with the S&P 500 and the components of the Nasdaq-100 Index, which is made up of the 100 largest Nasdaq-listed companies by market capitalization. After removing duplicates, this left a list of 523 stocks.

Among the 523 stocks, 107 are in a bear market -- that is, they were down at least 20% from their 52-week highs through Sept. 21, according to data provided by FactSet.

Among the 107, there are 35 with "buy" or equivalent ratings from at least two-thirds of analysts polled by FactSet. Here they are, sorted by the 12-month upside potential implied by the consensus price targets:

Company  Decline from 52-week high  Closing Price -- Sept. 21  52-week high  Date of 52-week high  Share "buy" ratings  Consensus price target  Implied 12-month upside potential 
Western Digital Corp. WDC  -29.1%  $55.47  $78.19  06/04/2021  70%  $93.39  68% 
Baidu Inc. ADR Class A BIDU  -55.8%  $156.71  $354.82  02/22/2021  86%  $258.24  65% 
Micron Technology Inc. MU  -25.6%  $72.14  $96.96  04/12/2021  88%  $114.03  58% 
Activision Blizzard Inc. ATVI  -30.1%  $73.03  $104.53  02/16/2021  94%  $115.34  58% 
NetEase Inc. ADR NTES  -40.5%  $79.95  $134.33  02/11/2021  94%  $125.11  56% 
News Corp. Class A NWSA  -20.6%  $22.21  $27.97  05/10/2021  80%  $32.86  48% 
General Motors Co. GM  -23.2%  $49.37  $64.30  06/07/2021  92%  $72.79  47% 
Hess Corp. HES  -26.1%  $67.31  $91.09  06/23/2021  67%  $99.13  47% 
Global Payments Inc. GPN  -29.1%  $156.58  $220.81  04/26/2021  81%  $227.15  45% 
VF Corp. VFC  -27.0%  $66.25  $90.79  04/29/2021  67%  $95.95  45% 
Pinduoduo Inc. ADR Class A PDD  -55.3%  $95.10  $212.60  02/16/2021  79%  $136.67  44% 
Diamondback Energy Inc. FANG  -21.9%  $80.04  $102.53  07/01/2021  91%  $114.09  43% 
Take-Two Interactive Software Inc. TTWO  -32.2%  $145.72  $214.91  02/08/2021  67%  $206.82  42% 
Freeport-McMoRan Inc. FCX  -33.9%  $30.48  $46.10  05/10/2021  72%  $43.21  42% 
Vertex Pharmaceuticals Inc. VRTX  -33.9%  $185.80  $280.99  10/13/2020  74%  $260.67  40% 
Alaska Air Group Inc. ALK  -24.4%  $56.11  $74.25  04/07/2021  93%  $78.71  40% 
Lamb Weston Holdings Inc. LW  -29.1%  $61.26  $86.41  03/08/2021  78%  $85.43  39% 
Eastman Chemical Co. EMN  -24.0%  $99.18  $130.47  06/01/2021  73%  $137.90  39% 
PTC Inc. PTC  -22.0%  $119.93  $153.73  07/23/2021  76%  $165.23  38% 
Fidelity National Information Services Inc. FIS  -22.2%  $121.38  $155.96  04/29/2021  72%  $165.93  37% 
Halliburton Co. HAL  -22.1%  $19.48  $25.00  06/04/2021  69%  $26.47  36% 
Stanley Black & Decker Inc. SWK  -20.0%  $179.89  $225.00  05/10/2021  67%  $241.71  34% 
Schlumberger Ltd. SLB  -27.0%  $26.93  $36.87  06/04/2021  80%  $35.90  33% 
Newmont Corp. NEM  -27.6%  $54.51  $75.31  05/19/2021  71%  $72.65  33% 
Southwest Airlines Co. LUV  -24.1%  $49.15  $64.75  04/14/2021  82%  $65.00  32% 
Valero Energy Corp. VLO  -25.5%  $63.32  $84.95  06/03/2021  86%  $83.41  32% 
Zimmer Biomet Holdings Inc. ZBH  -20.8%  $142.76  $180.36  04/29/2021  77%  $187.58  31% 
FMC Corp. FMC  -24.5%  $93.31  $123.66  01/13/2021  68%  $122.29  31% 
Cigna Corp. CI  -25.8%  $202.39  $272.81  05/10/2021  83%  $264.73  31% 
Corning Inc. GLW  -20.3%  $37.31  $46.82  04/26/2021  67%  $48.75  31% 
Leidos Holdings Inc. LDOS  -20.1%  $90.90  $113.75  01/25/2021  83%  $117.78  30% 
WestRock Co. WRK  -22.3%  $48.19  $62.03  05/17/2021  67%  $62.31  29% 
Peloton Interactive Inc. Class A PTON  -41.0%  $100.92  $171.09  01/14/2021  74%  $129.67  28% 
FedEx Corp. FDX  -21.2%  $252.07  $319.90  05/27/2021  75%  $321.15  27% 
JD.com Inc. ADR Class A JD  -32.1%  $73.50  $108.29  02/17/2021  94%  $93.11  27% 
Source: FactSet 

Click on the tickers for more about each company. The data above are limited, so the MarketWatch quote page can be an excellent start for your own research. Click here for Tomi Kilgore's new, detailed guide to the wealth of information available for free on the quote page.

Don't miss: Investors who want income need to understand this overlooked stock-market strategy

-Philip van Doorn

 

(END) Dow Jones Newswires

09-25-21 0910ET

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