Searching for value stocks is pretty simple: Find financially robust companies that have performed poorly from a share price perspective, and buy them when they’re down. When the share price comes back to reality, you’ll be a winner. Wall Street has the habit of kicking a stock when it’s down, as negative sentiment surrounding a particular name can spell doom for shareholders.
For those seeking value, these moments present an opportunity. Here, we’ll look at three value stocks that have seen better days, but also have a good chance at rebounding.
Over the past five years, Gilead Sciences (NASDAQ: GILD) has managed to lose about 40% of its value on the open market, and has vastly underperformed a passively held index fund over the same period (as shown below). As a market leader in the oncology, HIV, and hepatitis C drug markets, respectively, the company produces a suite of antivirals for typically hard-to-treat illnesses. While Gilead was — and is — front-and-center during the pandemic in its production of Veklury (more commonly known as remdesivir), it is not one of the major vaccine producers.