In times of market volatility, many investors sell stocks as part of a flight to safety. There's logic to this. As the saying goes, nobody got broke taking a profit. But investors with a higher risk tolerance know that volatility can create opportunity. That's when they go shopping. Or to follow the advice of Warren Buffett, they get greedy when other investors get fearful.
When some investors think about stocks for aggressive investors, they think about stocks trading under $20 or even penny stocks. In many cases, these stocks do offer growth potential, but they often come with significant risk.
However, that doesn't have to be the case. In this special presentation, we're analyzing seven stocks that are lagging the market as of November 2024 but have the possibility for significant upside. In many cases, the stocks on this list are blue-chip stocks that offer these gains with less risk.
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- Merck & Co.
- Occidental Petroleum
- Hershey
- IDEXX Laboratories
- BioMarin Pharmaceutical
- Heineken
- Coty
#1 - Merck & Co. (NYSE:MRK)
Merck & Co. (NYSE: MRK) is down 6.5% in 2024 and 11.5% in the three months ending October 2024. The issue stems from the company’s flagship drug, Keytruda, which will lose exclusivity in 2028.
That may sound like a long time, but to investors looking to take a long position, that’s a concern. Keytruda accounted for nearly 50% of Merck’s revenue in the second quarter of 2024 ($7.3 billion of the company’s $16.1 billion revenue).
However, as companies like AbbVie Inc. (NYSE: ABBV) have shown, new and emerging drugs can help offset lost revenue from patent expiration. In the case of AbbVie, Skyrizi and Rinvoq have helped maintain the company’s lost revenue from its flagship drug, Humira.
That’s why it’s important to look at a company’s pipeline. Merck has more than 80 candidates in Phase 2 trials and 30 in Phase 3 trials. None of these drugs would be a direct replacement for Keytruda, but many will work with Keytruda, which may allow Merck to expand the drug’s addressable market.
About Merck & Co., Inc.
Merck & Co, Inc operates as a healthcare company worldwide. It operates through two segments, Pharmaceutical and Animal Health. The Pharmaceutical segment offers human health pharmaceutical products in the areas of oncology, hospital acute care, immunology, neuroscience, virology, cardiovascular, and diabetes under the Keytruda, Bridion, Adempas, Lagevrio, Belsomra, Simponi, and Januvia brands, as well as vaccine products consisting of preventive pediatric, adolescent, and adult vaccines under the Gardasil/Gardasil 9, ProQuad, M-M-R II, Varivax, RotaTeq, Live Oral, Vaxneuvance, Pneumovax 23, and Vaqta names.
Read More - Current Price
- $101.87
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 13 Buy Ratings, 3 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $129.93 (27.5% Upside)
#2 - Occidental Petroleum (NYSE:OXY)
Due to interest rates staying higher for longer in 2024, oil prices haven’t followed the script that was expected in January. That’s why oil stocks like Occidental Petroleum Corp. (NYSE: OXY) are underperforming the market. In fact, OXY stock is down 16.9% in 2024.
Oil bulls will point to Warren Buffett and Berkshire Hathaway (NYSE: BRK.B), which has increased its stake in OXY stock to 29%. However, a significant driver of that growth comes from Occidental’s commitment to carbon capture, particularly in the Permian Basin. Skeptics will point out that there are better options when it comes to international exposure and scalability. However, Occidental believes that at some point in the future, it will generate as much revenue from carbon capture and storage (CCS) as it does from oil and gas production.
The Occidental Petroleum analyst forecasts on MarketBeat have a consensus Hold rating on OXY stock. However, they give the stock a consensus price target of $65.72, which is a gain of 30.9% from its current price.
About Occidental Petroleum
Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, and North Africa. It operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing. The company's Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas.
Read More - Current Price
- $50.56
- Consensus Rating
- Hold
- Ratings Breakdown
- 6 Buy Ratings, 11 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $65.72 (30.0% Upside)
#3 - Hershey (NYSE:HSY)
It's been a bitter year for growth-oriented investors to own shares of The Hershey Company (NYSE: HSY). The stock is down 4.38% in 2024, but it’s important to filter out the noise surrounding the stock’s decline.
You’ll hear that there are concerns about the impact of GLP-1 drugs on revenue. There may be some truth to that. However, the primary headwind for Hershey’s comes from elevated cocoa prices. In fact, Hershey’s is the one stock on this list that analysts are forecasting to have negative earnings in 2025.
So why is it a buy? First, if the Federal Reserve continues to lower interest rates, consumers may feel better about purchasing products like chocolate. And while that may not hit the company’s topline this holiday season, it may show up around Easter and Mother’s Day which occur in what is historically one of the company’s strongest quarters.
Plus, HSY stock is a dividend achiever having increased its dividend for 15 consecutive years. More importantly, the company has averaged 12.2% dividend growth over the past three years. That's significantly above the rate of inflation, which helps protect your investment.
About Hershey
The Hershey Company, together with its subsidiaries, engages in the manufacture and sale of confectionery products and pantry items in the United States and internationally. The company operates through three segments: North America Confectionery, North America Salty Snacks, and International. It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products, including mints, chewing gums, and bubble gums; protein bars; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items comprising spreads, bars, snack bites, mixes, popcorn, and pretzels.
Read More - Current Price
- $179.00
- Consensus Rating
- Reduce
- Ratings Breakdown
- 0 Buy Ratings, 14 Hold Ratings, 5 Sell Ratings.
- Consensus Price Target
- $191.61 (7.0% Upside)
#4 - IDEXX Laboratories (NASDAQ:IDXX)
IDEXX Laboratories Inc. (NASDAQ: IDXX) is a way for you to invest in the growing pet care sector. IDEXX manufactures drugs that are used for domestic animals, as well as livestock and poultry. A key growth driver for IDEXX is its point-of-care diagnostic testing which allows veterinary professionals to get more, and deeper, insights while they have an animal on site.
IDEXX stock is down 24.3% in 2024 and 6.9% in the week following its Q3 2024 earnings report. The company beat on the top and bottom lines and its number were higher year-over-year.
However, the company lowered its guidance on concerns over the demand for veterinary care. There are also concerns about the company’s valuation. It currently trades at around 40x forward earnings.
Two analysts have lowered their price targets since the earnings report. However, the stock is still considered a Moderate Buy with a consensus target of $552.38, which would be a 32% upside.
About IDEXX Laboratories
IDEXX Laboratories, Inc develops, manufactures, and distributes products primarily for the companion animal veterinary, livestock and poultry, dairy, and water testing markets in Africa, the Asia Pacific, Canada, Europe, Latin America, and internationally. The company operates through three segments: Companion Animal Group; Water Quality Products; and Livestock, Poultry and Dairy.
Read More - Current Price
- $414.52
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $552.38 (33.3% Upside)
#5 - BioMarin Pharmaceutical (NASDAQ:BMRN)
BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) is another biopharmaceutical company on this list. BioMarin specializes in developing drugs for patients with serious and life-threatening rare diseases and medical conditions. As of November 2024, the company has eight products in market with an additional 11 candidates in clinical trials.
BMRN stock is down 31.8% in 2024 despite posting quarterly revenue (18%) and earnings (82%) that are sharply higher year-over-year. However, skeptics will readily point out that the company disappointed earnings expectations by 29%.
That's enough to fuel concerns about the company’s valuation (it’s trading at around 27x forward earnings) and how soon its pipeline will start generating revenue. On the other hand, the stock is showing signs of being oversold, and analysts are calling for a 29% increase in earnings in the next 12 months. BMRN has a Moderate Buy rating with a $94.16 price target that would be a 42% gain for investors.
About BioMarin Pharmaceutical
BioMarin Pharmaceutical Inc develops and commercializes therapies for people with serious and life-threatening rare diseases and medical conditions. Its commercial products include Vimizim, an enzyme replacement therapy for the treatment of mucopolysaccharidosis (MPS) IV type A, a lysosomal storage disorder; Naglazyme, a recombinant form of N-acetylgalactosamine 4-sulfatase for patients with MPS VI; and Kuvan, a proprietary synthetic oral form of 6R-BH4 that is used to treat patients with phenylketonuria (PKU), an inherited metabolic disease.
Read More - Current Price
- $66.01
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 14 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $94.16 (42.6% Upside)
#6 - Heineken (OTCMKTS:HEINY)
Heineken N.V. (OTCMKTS: HEINY) may be a case of the right stock at the right time. The drinks and spirits category faces the impact of higher prices that are weighing on consumer sentiment. But the market for premium beer is growing strong, and that’s Heineken’s core business.
What may be more relevant to investors is how the company is embracing generative AI. Specifically, it’s finding that the technology is allowing the company and its management to easily sift through volumes of customer data to generate meaningful insights. The company is also beginning to use generative AI in the area of product innovation.
HEINY stock is down about 20% in 2024. However, analysts give the stock a consensus Buy rating and have a consensus price target of $50.57, which is 24% higher than the closing price on November 4, 2024.
About Heineken
Heineken N.V. brews and sells beer and cider in the Americas, Europe, Africa, the Middle East, Eastern Europe, and the Asia Pacific. The company provides soft drinks and water. It offers its beers under the Heineken, Heineken Light, Orchard Thieves, Orchard Thieves Light, Birra Moretti, Coors, Murphy's and Beamish Stouts, Desperados, Tiger, Sol, and Foster's brand, as well as under regional and local brands.
Read More - Current Price
- $40.44
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#7 - Coty (NYSE:COTY)
Coty Inc. (NYSE: COTY) is a retail stock in the health and beauty sector. The stock is down approximately 39% in 2024 and 16% in the month heading into its third quarter earnings report. The concern comes as Coty guided to slowing U.S. sales. While the company is undertaking cost-cutting measures, investors will be looking at the company’s path to renewed growth.
However, if you’re an aggressive investor, COTY stock appears to be oversold. Trading at $7.50 as of this writing, the stock is now a penny stock by some estimates. It also has a forward P/E ratio of 13.7x.
Critics will say that some stocks are cheap for a reason. Several analysts have lowered their price targets since the company’s guidance warning. But the stock maintains a Moderate Buy rating with a consensus price target of $12.15 which offers investors a 61% upside from its current price.
About Coty
Coty Inc, together with its subsidiaries, manufactures, markets, distributes, and sells beauty products worldwide. It operates through Prestige and Consumer Beauty segments. The company provides fragrance, color cosmetics, and skin and body care products. It offers Prestige segment products primarily through prestige retailers, including perfumeries, department stores, e-retailers, direct-to-consumer websites, and duty-free shops under the Burberry, Calvin Klein, Chloe, Davidoff, Escada, Gucci, Hugo Boss, Jil Sander, Joop!, Kylie Jenner, Lancaster, Marc Jacobs, Miu Miu, Orveda, philosophy, SKKN BY KIM, and Tiffany & Co brands.
Read More - Current Price
- $7.47
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 11 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $12.15 (62.6% Upside)
Investors don't lack for information. In fact, it's easy to become a victim of information overload. This can work contrary to your investment goals and cause you to miss out on significant gains.
That's one way that MarketBeat can help. A variety of free stock screeners allow you to filter stocks based on the criteria that are important to you. For example, if you only want energy stocks, you can sort for that. If you want stocks that have a Buy rating from analysts, you can do that.
And there are many other examples. The stocks on this list were all trading within 10% of their 52-week low as of November 4, 2024. And more importantly, analysts were forecasting 10% to 15% earnings growth in the next 12 months. Earnings growth is often the most reliable indicator of future stock price growth. So, when you see stocks that are lagging the market but with positive upside potential, it can give you confidence that they are likely to outperform.
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