Written by Norman Isaac Mwambazi

Check out these stocks that are currently in bear-market territory but Wall Street expects them to soar as much as 68%

As we enter into the evening of the 2021 calendar year, the market data we have seen in the nine …

As we enter into the evening of the 2021 calendar year, the market data we have seen in the nine months so far indicate that the stock market has indeed had a good year. In addition to that, consensus analysts expect it to finish strong as some companies will yield from a festive season that is reopened, unlike last year’s where the global economy was still pretty much under lockdown.

The benchmark S&P 500 Index (SPX), which tracks the 500 largest publicly traded companies in the world by market capitalisation is up 16% year to date, even though numerous companies that make up the index are in bear-market territory. However, this should not call for an alarm, because Wall Street analysts expect these companies to roar back.

Here is the list of those stocks

Among the 500 stocks that make up the S&P 500 index, 96 have seen their stock price fall this year, while 99 have dropped at least 20% from their 52-week highs. First, FactSet provides data of the 2021 price change of the five biggest components of the S&P 500 Index, also known as “Big Tech”. These five companies make up almost 23% of the SPDR S&P 500 ETF Trust portfolio and the index.

CompanyTickerPrice change – 2021Share of SPY
Apple Inc.AAPL8.1%6.1%
Microsoft Corp.MSFT32.5%6.0%
Amazon.com Inc.AMZN2.7%4.0%
Facebook Inc. Class AFB30.9%2.3%
Alphabet Inc. Class AGOOGL58.7%2.3%
Alphabet Inc. Class CGOOGL59.4%2.1%

Source: FactSet

All these companies have seen their stock performing well this year, posting glittering quarterly earnings reports and in June, Facebook Inc. (ticker: FB) also became a trillion-dollar company by market capitalisation.

There has been some activity that has worked in favour of these companies this year, and particularly in the previous few months, attracting investors to make movements on the stock market. Apple released the latest instalment of its flagship product the iPhone. The newly released iPhone 13 comes in four models; iPhone mini, iPhone 13, iPhone 13 Pro, and iPhone Pro Max.

Last week, tech giant Microsoft announced a $60 billion share repurchase program that is expected to cover the next three years of the company’s share repurchase cycle. The company also announced an 11% increase of dividends it will pay out to its shareholders in December. Amazon and Alphabet have been quiet but notable of Amazon’s activity is the retirement of founder and long-serving Chief Executive Officer (CEO) Jeff Bezos in July. Bezos is now the company’s Executive Chairman.

Beloved stocks in bear markets

Apart from the Big Tech, the table below shows 35 stocks, all large-caps and components of both the S&P 500 Index and the Nasdaq-100 Index but they are currently in a bear market and closed the trading session on September 21, 2021, down at least 20% from their 52-week highs. However, even though they have dropped that much, these stocks still score highly on analysts’ recommendation lists. According to FactSet, all 35 of them have a “Buy” or equivalent rating from at least two-thirds of the Wall Street analysts the market data collection and provider company surveyed.

The table below is sorted in descending order of the 12-month upside potential implied by the consensus price targets.

CompanyDecline from 52-week highClosing Price – Sept. 2152-week highDate of 52-week highShare “buy” ratingsConsensus price targetImplied 12-month upside potential
Western Digital Corp. WDC-29.1%$55.47$78.1906/04/202170%$93.3968%
Baidu Inc. ADR Class A BIDU-55.8%$156.71$354.8202/22/202186%$258.2465%
Micron Technology Inc. MU-25.6%$72.14$96.9604/12/202188%$114.0358%
Activision Blizzard Inc. ATVI-30.1%$73.03$104.5302/16/202194%$115.3458%
NetEase Inc. ADR NTES-40.5%$79.95$134.3302/11/202194%$125.1156%
News Corp. Class A NWSA-20.6%$22.21$27.9705/10/202180%$32.8648%
General Motors Co. GM-23.2%$49.37$64.3006/07/202192%$72.7947%
Hess Corp. HES-26.1%$67.31$91.0906/23/202167%$99.1347%
Global Payments Inc. GPN-29.1%$156.58$220.8104/26/202181%$227.1545%
VF Corp. VFC-27.0%$66.25$90.7904/29/202167%$95.9545%
Pinduoduo Inc. ADR Class A PDD-55.3%$95.10$212.6002/16/202179%$136.6744%
Diamondback Energy Inc. FANG-21.9%$80.04$102.5307/01/202191%$114.0943%
Take-Two Interactive Software Inc. TTWO-32.2%$145.72$214.9102/08/202167%$206.8242%
Freeport-McMoRan Inc. FCX-33.9%$30.48$46.1005/10/202172%$43.2142%
Vertex Pharmaceuticals Inc. VRTX-33.9%$185.80$280.9910/13/202074%$260.6740%
Alaska Air Group Inc. ALK-24.4%$56.11$74.2504/07/202193%$78.7140%
Lamb Weston Holdings Inc. LW-29.1%$61.26$86.4103/08/202178%$85.4339%
Eastman Chemical Co. EMN-24.0%$99.18$130.4706/01/202173%$137.9039%
PTC Inc. PTC-22.0%$119.93$153.7307/23/202176%$165.2338%
Fidelity National Information Services Inc. FIS-22.2%$121.38$155.9604/29/202172%$165.9337%
Halliburton Co. HAL-22.1%$19.48$25.0006/04/202169%$26.4736%
Stanley Black & Decker Inc. SWK-20.0%$179.89$225.0005/10/202167%$241.7134%
Schlumberger Ltd. SLB-27.0%$26.93$36.8706/04/202180%$35.9033%
Newmont Corp. NEM-27.6%$54.51$75.3105/19/202171%$72.6533%
Southwest Airlines Co. LUV-24.1%$49.15$64.7504/14/202182%$65.0032%
Valero Energy Corp. VLO-25.5%$63.32$84.9506/03/202186%$83.4132%
Zimmer Biomet Holdings Inc. ZBH-20.8%$142.76$180.3604/29/202177%$187.5831%
FMC Corp. FMC-24.5%$93.31$123.6601/13/202168%$122.2931%
Cigna Corp. CI-25.8%$202.39$272.8105/10/202183%$264.7331%
Corning Inc. GLW-20.3%$37.31$46.8204/26/202167%$48.7531%
Leidos Holdings Inc. LDOS-20.1%$90.90$113.7501/25/202183%$117.7830%
WestRock Co. WRK-22.3%$48.19$62.0305/17/202167%$62.3129%
Peloton Interactive Inc. Class A PTON-41.0%$100.92$171.0901/14/202174%$129.6728%
FedEx Corp. FDX-21.2%$252.07$319.9005/27/202175%$321.1527%
JD.com Inc. ADR Class A JD-32.1%$73.50$108.2902/17/202194%$93.1127%

Source: FactSet

The table above shows a clear indication that just because a stock has fallen does not mean it will not come back. For Wall Street analysts to give a buy recommendation of a particular stock, they put into consideration a whole host of things like the prevailing market conditions, the broad economic performance, competitor advantage, capital and cash in-flows and out-flows, among others all of which make up what is known as technical and fundamental analysis.