In this article, we will look at oversold names that offer double-digit ROE growth for investors across sectors. On April 3, markets were affected by political concerns once more after President Trump indicated that the war with Iran would continue for some weeks, sending oil prices soaring and affecting the stocks. The Dow Jones fell by 61 points or 0.13%, while the S&P500 and Nasdaq had small increases of 0.11% and 0.18%, respectively.
During the trading hours, markets reacted favorably to the news reported by the Iranian state-run media that the country is engaged with Oman to establish protocols for monitoring vessels transiting through the Strait of Hormuz. According to Todd Schoenberger, Chief Investment Officer at CrossCheck Management, this carries importance not just because of the oil but also helium. He emphasized the importance of helium given its significance in the production of semiconductors, since there is no alternative to it. Schoenberger stated:
Currently in our own domestic economy, helium is more valuable than foreign oil because it’s used to cool the processing of semiconductors and there is no substitute for it.
The bottom line for investors in such an environment is evident. Geopolitical events will continue to fuel market fluctuations, and investors must play their cards accordingly. The coming few days are likely to be volatile for the market as it processes numerous events, with oil prices and chip shortages remaining key issues.
With that background, let’s explore our 7 Oversold Stocks to Buy With Double-Digit ROE Growth.
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Our Methodology
To identify relevant stocks for this article, we conducted a sector-agnostic screening of U.S.-listed companies with market capitalizations above $2 billion, an RSI indicator below 30, and forward ROE growth greater than 10%.
Also, we only shortlisted stocks with at least 65% upside potential, according to analyst consensus as of the April 10 close. Finally, we selected 7 stocks with the highest upside and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
7. Boston Scientific Corp. (NYSE:BSX)
Boston Scientific Corp. (NYSE:BSX) is one of the 7 oversold stocks to buy with double-digit ROE growth.
On April 7, Joanne Wuensch from Citi reduced the price target on Boston Scientific Corp. (NYSE:BSX) from $98 to $87 while maintaining a Buy rating on the stock. This implies an adjusted upside potential of more than 40% despite the downward revision in price target.
Joanne noted that the medical technology segment is currently facing several compressions because of the uncertainties involved. Consequently, as part of the first quarter earnings preview, the firm revised its estimates across the group.
On March 30, Boston Scientific Corp. (NYSE:BSX) and Penumbra Inc. (NYSE:PEN) announced an updated regulatory timeline concerning their proposed corporate merger. Previously, both organizations submitted initial notification documents to both the FTC and the DOJ under the HSR Act on February 13.
The intervention prolongs the mandatory waiting period until 30 days after the organizations substantially satisfy all compliance demands, unless the parties voluntarily extend the timeline or regulators finish the evaluation early. Executive leadership expects to respond promptly while actively cooperating with federal authorities.
Boston Scientific Corp. (NYSE:BSX) specializes in medical devices for interventional specialties such as cardiovascular, endo-surgery, and neuro-modulation. The company operates through MedSurg and Cardiovascular segments, and offers a range of devices, including biliary stent systems, electrocautery enhanced delivery systems, direct visualization systems, and single-use duodeno-scopes.
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