Former High-Flyers with New Lift Ahead?
By Michael Kaye, CFA
The Nasdaq composite index reached its zenith of 5048.62 just about three years ago. No need to recap what has happened since then. But it is worth noting that given the scope of the declines in many formerly high-flying stocks, their downside may be limited -- and the potential exists for capital appreciation as the overall market begins to recover. Of course, it's doubtful that chastened investors will ever bid these stocks back up to the heights seen in the market bubble.
That's the background for this week's screen. We started with the most painful part, searching our database for stocks now trading at one-fifth or less their value from highs established in the last five years. But then we sifted for those ranked either 4 STARS (accumulate) or 5 STARS (buy), meaning that S&P analysts view their prospects favorably: They're expected to outperform the overall market over the next 6 to 12 months.
These 12 stocks emerged:
Kaye is a portfolio services analyst for Standard & Poor's