It happened in 2008 and 2009, and, despite the huge “melt-up” rally off the March lows, many of the top companies that investors are very familiar with have taken a beating. Needless to say, the ones that have been beaten down the most are in sectors that are struggling the most with the temporary new normal of shelter-in-place, and other restrictions. While conditions are improving as the country opens up, some sectors continue to fare better than others, and some incredible bargains are there for the taking.
We screened the BofA Securities research database looking for well-known companies that are likely to survive the current troubles and very well could offer patient investors some huge returns over the next year or so. Long-term investors that did that in 2008 and 2009 absolutely killed it over the next few years. While all five of these stocks are rated Buy, remember that no single analyst report should be used as a sole basis for any buying or selling decision.
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B2Gold
This is a small-cap gold stock for aggressive investors looking for sector exposure. B2Gold Corp. (NYSE: BTG) is a global, growth-oriented, mid-tier gold producer whose primary assets include gold mines located in Nicaragua (La Libertad and El Limon), the Philippines (Masbate), Namibia (Otjikoto) and Mali (Fekola).
The company recently announced positive drill results from the Mamba zone, which is located within the Anaconda area approximately 20 kilometers from the Fekola Mine, as well as positive infill drill results from the Fekola mineral resource area and step-out results north of the Fekola resource.
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The company posted strong first-quarter results and the analysts said this:
B2Gold delivered a strong first quarter earnings result and ended the quarter with net debt of just $17 million, down 86% from year-end 2019. The quarterly dividend was doubled to $0.02 per share, good for an annualized yield of 1.5%; substantial 2020 cash flow is expected. Due to core mine outperformance, 2020 guidance was reiterated despite that the Nicaraguan assets could remain suspended.
The BofA Securities price target for the shares is $6.40, and no Wall Street consensus target was available. B2Gold stock closed Thursday at $5.52 a share.
General Electric
If any stock has taken a beating over the past three years, it has been this legendary corporation. General Electric Co. (NYSE: GE | GE Price Prediction) businesses are organized broadly under seven segments: Power, Renewable Energy, Energy Connections, Oil & Gas, Aviation, Healthcare, Transportation and GE Capital. The company’s products and services include power generation equipment, aircraft engines, locomotives, medical equipment, compressors and others. Over half of the business is tied to service and aftermarket support.
In 2018, the venerable American industrial giant got the ultimate humiliation of being removed from the Dow Jones industrial average after a stay of over 100 years. General Electric is still one of the most valuable brands in the world.
The massive restructuring and debt reduction plans that have been announced come after years of acquisitions and changes in the core business at GE, and in some cases what many on Wall Street thought were ill-advised moves by the former CEO Jeff Immelt. The company’s once dependable dividend has been chopped to $0.04 a share and may be eliminated altogether at some point.
Investors receive just a 0.65% dividend. BofA Securities has an $11 price target, while the consensus target is much lower at $8.86. General Electric stock closed at $6.48 on Thursday.
Huntington Bancshares
This smaller cap bank could be an outstanding addition for more aggressive portfolios. Huntington Bancshares Inc. (NASDAQ: HBAN) operates as a holding company for the Huntington National Bank, which provides commercial, small business, consumer and mortgage banking services.
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Huntington’s Retail and Business Banking segment offers financial products and services, including checking accounts, savings accounts, money market accounts, certificates of deposit, consumer loans and small business loans, as well as investments, insurance, interest rate risk protection and foreign exchange and treasury management services.
The company’s Commercial Banking segment provides corporate risk management and institutional sales, trading, and underwriting services; commercial property and casualty, employee benefits, personal lines, life and disability, and specialty lines of insurance; and brokerage and agency services for residential and commercial title insurance, as well as excess and surplus product lines of insurance.
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Huntington also offers automotive and commercial real estate financing, and a regional private bank and private client business.
Shareholders pocket a nice 7.34% dividend, which appears safe for now. The $10 BofA Securities target price compares to the $9.44 consensus figure. Huntington Bancshares stock ended Thursday at $8.17 per share.
Parsley Energy
This is an excellent play for aggressive investors looking for energy exposure. Parsley Energy Inc. (NYSE: PE) is an oil and gas producer with 227,000 net acres in the Permian Basin. The majority of acreage sits on the Midland side of the basin, but the company also holds a small acreage position in the Delaware Basin. Through strategic acquisitions and acreage swaps, it has grown its acreage position since its initial public offering and has over 7,900 horizontal locations across multiple prospective zones.
The company is catalyst rich and a Permian Basin pure play. Parsley Energy has some of the strongest wells in the basin, generating returns that are among the best in the industry. It is also rapidly de-risking its drilling inventory and is well positioned to continue to beat its strong growth projections.
BofA Securities has set a $12 price target on the shares. The consensus target is $12.30, and Parsley Energy stock closed most recently at $9.31.
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Sirius XM
This stock has been on a roll this year and looks poised to go higher. Sirius XM Holdings Inc. (NASDAQ: SIRI) is the world’s largest radio company measured by revenue, and it has approximately 33.1 million subscribers. The company creates and offers commercial-free music; premier sports talk and live events; comedy; news; exclusive talk and entertainment; and a wide-range of Latin music, sports and talk programming. Sirius XM is available in vehicles from every major car company and on smartphones and other connected devices as well as online.
Sirius XM is also a leading provider of connected vehicles services, giving customers access to a suite of safety, security and convenience services, including automatic crash notification, stolen vehicle recovery assistance, enhanced roadside assistance and turn-by-turn navigation.
The $7 BofA Securities price target may be going higher soon. The posted consensus price target is $6.39, and Sirius XM stock closed trading at $5.19 on Thursday.
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These five companies that are very well known to most investors have all been sent to the single-digit midget penalty box. While some of these companies may have a difficult road back to prosperity, given what we have seen in the past, and the massive liquidity being provided by Washington, D.C., the odds are good that each survives this downturn.
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