4 Buy-Rated Stocks That Are Cheaper Now Than in March 2009

By Lee Jackson Updated Jan 11, 2:48PM EST · Published Nov 16, 7:05AM EST

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4 Buy-Rated Stocks That Are Cheaper Now Than in March 2009 — © Thinkstock

In an incredible snapshot of just how strong the rally of the last nine and a half years has been, only nine companies from the S&P 500 are trading today below their prices when the market bottomed in March of 2009, according to research from Bespoke. While it is amazing so many are up, it’s even more amazing for shareholders of the nine that are down, especially if they have held them all along.

At 24/7 Wall St., we thought the statistic was so incredible, especially since some of the companies are solid players in their respective sectors, we wanted to see if any were rated Buy. We screened the Merrill Lynch research universe and found four with Buy ratings. These could be outstanding values for true value buyers.

CenturyLink

This company offers solid value, has zero foreign sales exposure and has kept its dividend intact. CenturyLink Inc. (NYSE: CTL) is the nation’s third-largest telephone company and the largest rural exchange provider serving residential, enterprise and wholesale customers. It is the product of the acquisition of Embarq by CenturyTel in 2008, Qwest Communications in 2011 and Level 3 Communications in 2017. Embarq is Sprint’s former wireline unit.

With the Level 3 acquisition doing well and things looking up for the company, many analysts are starting to come around on the stock. Merrill Lynch has been positive on the shares for some time, and the firm expects the company’s strong free-cash-flow generation to support the dividend through 2019 and beyond. CenturyLink still trades almost 20% below its March 9 close of $23.56.

Its investors receive a gigantic 11.59 % dividend. The Merrill Lynch price target for the shares is a whopping $29, while the Wall Street consensus target is $21.27. The stock closed trading on Thursday at $18.96.

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Devon Energy

This company has been hit as oil has tumbled, and it is still over 15% below the close on March 9 of 2009. Devon Energy Corp. (NYSE: DVN) is an independent energy company that primarily engages in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs) in the United States and Canada. It operates approximately 19,000 wells.

The company also offers midstream energy services, including gathering, transmission, processing, fractionation and marketing to producers of natural gas, NGLs, crude oil and condensate through its natural gas pipelines, plants and treatment facilities.

The company says it has plans to divest assets worth $1 billion that are non-core, including portions of the Barnett Shale, with an anticipated sale occurring in the next 12 to 18 months. Proceeds will further enhance the balance sheet and also could provide capital to continue to accelerate growth going forward in 2019.

Investors receive a 1.05% dividend. Merrill Lynch has a huge $65 price target, while the consensus target is $50.67. The stock ended Thursday at $30.62.

Mosaic

This stock has been on fire over the past six weeks but still trades about 10% below the March 9, 2009, close. Mosaic Co. (NYSE: MOS) is a $9 billion in sales fertilizer producer that is the world’s largest integrated producer of phosphate (11% share) and the third largest global producer of potash (15% share).

Mosaic markets its North-American based production throughout the world with distribution assets in 11 countries. The company was created by the October 22, 2004, merger of IMC Global and Cargill Crop Nutrition. Mosaic also has phosphate production joint ventures in Brazil, China and, most recently, Saudi Arabia.

Investors are paid a puny 0.28% dividend. Merrill Lynch has set a price objective of $42. The consensus target is $38.68, and shares were last seen at $36.14.

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Newmont Mining

This is one of the largest mining companies, and its stock is a solid buy for more conservative accounts. Newmont Mining Corp. (NYSE: NEM) is a leading gold and copper producer. It employs approximately 29,000 employees and contractors, with the majority working at managed operations in the United States, Australia, Ghana, Peru, Indonesia and Suriname. Newmont is the only gold producer listed in the S&P 500 index.

Last year Newmont announced that “first gold” has been poured at its new mine, called the Merian gold mine, in Suriname in South America. It reported Merian contains gold reserves of 5.1 million ounces and that annual production is expected to average between 400,000 and 500,000 ounces of gold at competitive costs during the first five full years of production.

Newmont has indicated that it could increase the dividend this year by at least 50%. Merrill Lynch feels the miner has sufficient free cash flow to pay higher dividends and continue reducing debt and investing in projects. The stock is down almost 16% from the close on March 9 of 2009.

Shareholders receive a 1.7% dividend. The $41.50 Merrill Lynch price objective compares with a $40.75 consensus estimate. Shares closed most recently at $32.86.

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Shares of these four very good companies still trade lower than when the market bottomed in 2009. While certainly not momentum plays, they are somewhat out of favor and could provide good value in what is still a very rich market going forward.

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.