Raymond James says buy these 12 ‘center of the storm’ stocks that are set to rebound as the economy reopens – including 6 that can outperform the S&P 500 in the coming months

  • It’s hard to find stocks that still have room left to run as the market continues to rally.
  • But many companies within sectors that were hit the hardest by COVID are trading below 2019 EVs. 
  • Raymond James spotted 12 names within these sectors that can generate a total return of 15% or more.
  • Visit the Business section of Insider for more stories.

This past year has been a wild ride for the stock market.  

And it is mostly due to the pandemic that has caused sharp market movements, double-digit gains in some stocks, and an increase in retail trading.

While the entire market was impacted by the pandemic, stocks in industries like restaurants, retail, commercial real estate, and airlines weren’t as lucky as the tech names that saw their prices soar to record highs and into bubble territory. 

As a matter of fact, shares of renowned names like Apple and Amazon saw increases of up to 70% in their share prices in 2020. Tesla’s stock went up 740% that same year. 

But as many continue to crowd into the tech sector, it opens up an opportunity to invest in some of the unloved sectors that are primed to rebound this year. 

With the increasing prospect of the economy reopening this year on the back of two immensely effective vaccines and one offering good protection, stocks in the airline and REITs sectors have the potential to make a comeback and rise. 

In a Feb. 9 note, Raymond James strategist Tavis C. McCourt said that around 58% of airlines and 89% of REITs that the firm covers still trade below their pre-COVID enterprise value, which is a more comprehensive valuation gauge than market cap.

He and his team found names in “‘center of the storm’ industries” that are expected to generate a total return of at least 15% over the next 6 to 12 months. To put that it into perspective, according to Goldman Sachs, the S&P 500’s annual average return in the past 10 years is 13.6%

These are the 12 names excluding the hard-hit REITs sector with strong buy ratings that Raymond James sees significant price upside in as the economy reopens.

1. SkyWest

Ticker: SKYW

Sector: Airline 

Stock price change needed to return to pre-covid EV levels: 59%

Expected to outperform the S&P 500

Source: Raymond James 

2. Alaska Air

Ticker: ALK

Sector: Airline 

Stock price change needed to return to pre-covid EV levels: 25%

Expected to outperform the S&P 500

Source: Raymond James 

3. Boston Scientific

Ticker: BSX

Sector: Medical Device 

Stock price change needed to return to pre-covid EV levels: 19%

Expected to outperform the S&P 500

Source: Raymond James 

4. Couche-tard Class B

Ticker: ATD.B

Sector: Consumer Defensive

Stock price change needed to return to pre-covid EV levels: 13%

Expected to outperform the S&P 500

Source: Raymond James 

5. ARKO

Ticker: ARKO

Sector: Consumer Cyclical

Stock price change needed to return to pre-covid EV levels: 12%

Expected to outperform the S&P 500

Source: Raymond James 

6. AutoZone

Ticker: AZO

Sector: Consumer Cyclical

Stock price change needed to return to pre-covid EV levels: 4%

Expected to outperform the S&P 500

Source: Raymond James 

7. National Retail Properties

Ticker: NNN

Sector: Real Estate

Stock price change needed to return to pre-covid EV levels: 33%

Source: Raymond James 

8. Healthcare Realty

Ticker: HR

Sector: Real Estate

Stock price change needed to return to pre-covid EV levels: 19%

Source: Raymond James 

9. Four Corners Property Trust

Ticker: FCPT 

Sector: Real Estate

Stock price change needed to return to pre-covid EV levels: 16%

Source: Raymond James 

10.

Ticker: ADC

Sector: Real Estate

Stock price change needed to return to pre-covid EV levels: 15%

Source: Raymond James 

11. Gaming and Leisure Properties

Ticker: GLPI

Sector: Real Estate

Stock price change needed to return to pre-covid EV levels: 14%

Source: Raymond James 

12. VICI Properties

Ticker: VICI

Sector: Real Estate

Stock price change needed to return to pre-covid EV levels: 6%

Source: Raymond James 

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