Wall Street is reluctant to get too bearish on a stock, but when it does, it can be worth paying attention—especially when the analysts agree that a stock isn’t a Buy.
No LoveStocks in the Russell 1000 with at least five analyst rating and zero buy calls. Source: Bloomberg When we see that kind of consensus, we usually want to start thinking about taking the other side of the trade. The fact that the 13 stocks aren’t expensive—they trade at about 12 times 12-month forward earnings, not including AMC, which isn’t profitable—only makes them more enticing, particularly compared with the S&P 500, which trades for closer to 18 times.
This isn’t just a fluke of timing either. In October 2022, there were nine stocks in the Russel 1000 with no Buy ratings. Those stocks are down an average of about 21% over the past 12 months. The S&P 500 is up about 20% over the same span. Only two of the nine stocks—Brighthouse and Commerce Bancshares—rose and neither outperformed the market.
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