Top Rated Stocks to Buy for 2015 – Helpful Ideas You Can Use in Finding Top Stocks
Tue, Feb 18, 2014
Top Stocks To Buy For Long Term
You are a genius!
Don’t think too much of yourself. Everyone did that who owned stocks.
Contrarian investors did much better.
The best-performing stocks of 2013 turned out, once again, to be the worst-performing stocks of the year before.
Two of the best were Fannie Mae (FNMA) and Freddie Mac (FMCC). I don’t need to tell you about the disasters that both of these companies have been. As the foundation of the 2008 financial crisis, they’re shares slid more than 99%. Both, however, were up more than 900% last year.
That’s just some examples why contrarian investing is so powerful.
Meb Faber of Meb Faber Research provides the historical data on buying stocks that are down is the best way to go.
He found that since the 1920s, the further a stock market sector declines, the more it rebounds.
More specifically, a sector that’s down 60% rebounds 57% over the next three years. A sector down 80% returns on average 172%. And a sector that has fallen 90% will on average rise 240% over the next three years.
That all sounds easy enough. It makes sense too. But the emotional aspects of investing in companies flat on their backs and trading at rock bottom prices makes doing that much harder than it seems.
Take a look at these stocks that had terrible runs over the last 52 weeks.
None are easy to buy, but as a group they are likely to be the best-performing stocks in 2015.
Three Top-Rated Stocks for 2015
National Bank of Greece (NBG) shares are down 62% in past year.
Greece has been at the center of the ongoing European financial crisis. At the center of Greece is the National Bank of Greece.
There is no immediate way for Europe to get out of its financial crisis either.
The Euro currency allowed countries like Greece to borrow at the same rates as industrial powerhouses like Germany.
Debt has piled up has been piled up for years. It will take years to work off.
The debt must be eliminated. Some will be written off. More, however, will likely be inflated away.
The only way out – and the direction the European Central Bank has committed to doing – is inflation.
That’s a great position to be in if you’re an underwater lender like the National Bank of Greece.
And its shares are way down. On a split-adjusted basis they are down from $600 in 2007 and $400 per share in 2010.
Today they are trading for less than $5. Just like Fannie Mae and Freddie Mac have benefited greatly from a crisis moving to a terrible situation, the National Bank of Greece can do the same. Even the slightest bit of good news will send them soaring once again.
Another stock that’s been left for dead is JC Penny (JCP). Its shares are down 69% while the stock market posted stellar gains, which, according to historical data, would make it a top-rated stock.
That is not the case at all.
Fundamentally, the times have just passed JCP right by.
Once a major “anchor store” to malls across the United States, a lot has changed.
And that’s the problem.
The result is a once-dominant department store sliding into penny stock status.
The analysts couldn’t be more bearish on the stock. Currently 27% of the analysts have a “Sell” or “Strong Sell” rating on JCP shares. That’s well above the average for all stocks with on 6% rated “Sell” or worse.
Some major investors have thrown in the towel on JCP. Soros Fund Management and William Ackman’s Pershing Square Capital Management, two of the most closely watched investors in the world because of their outstanding performance, have both sold out completely of JCP.
Everything that could have gone wrong for JCP has likely gone wrong.
The current consensus earnings estimate for next year is for JCP to lose $3 per share. Keep in mind it’s only a $6 stock!
If JCP does anything half right in 2015, its stock should do very well.
Finally, if you’re looking for the worst-performing stocks last year to find the top-rated stocks this year, the gold mining sector is full of them.
One of them, Gold Field Limited (GFI), is a very special situation. It primarily a South African gold miner and has more than 64 million ounce of gold reserves. It has low debt and an ultra-low price-to-book-ratio (P/B) of 0.64.
Its shares have been absolutely hammered. They were down 54% in the past 12 months. And they’re down about 70% from their 2011 highs.
Most importantly, its shares look like they’re starting to recover. They’re up 30% since hitting lows a few months ago. And any significant rise in gold prices will drive its shares back to past highs.
The Worst of 2013 and the Best of 2015
In the end, all of these stocks are not exactly top-rated stocks by most of Wall Street.
The companies are all facing significant problems. Nobody wants anything to do with them.
As a result, they are cheap and expectations are very low for their future prospects.
Those are all the hallmarks of a winning contrarian investment.
If history is our guide, these top-rated investments for contrarian investors will likely be top-rated by Wall Street again in the future.
But that won’t happen until these stocks double or triple from their current values. Which given the historical returns of stocks which have performed as well as these is likely in the next one to three years.
The Group of Big Investors in United States.
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