4 Big Loser Stocks of 2015 That Could End Up 2016's Biggest Winners

Investing

Published: January 6, 2016 10:55 am

Last Updated: January 13, 2020 3:23 pm

One of the keys to smart investing is to not overpay for stocks. Sure, it sounds easy, but the reality is many investors end up chasing hot stocks long after the value has left the station.

Often stocks that are laggards in a previous year can all of a sudden perk up and become winners the next year. There are multiple reasons why: The business outlook improves, short-sellers that have preyed on the stock finally give up, changes in the economy and sector dynamics and more.

A new Jefferies research note includes a fascinating chart of big losers from last year that have started out 2016 on fire. Needless to say, some companies from the energy sector show up, but some other solid companies also make the board. We screened the list for stocks that could continue to stay strong and provide investors solid gains.

FLIR Systems

This stock had a rough 2015, down almost 12%, but it is up close to 8% to start this year. FLIR Systems Inc. (NASDAQ: FLIR) is a world leader in the design, manufacture and marketing of sensor systems that enhance perception and awareness. FLIR’s advanced thermal imaging and threat detection systems are used for a wide variety of imaging, thermography and security applications, including airborne and ground-based surveillance, condition monitoring, research and development, manufacturing process control, search and rescue, drug interdiction, navigation, transportation safety, border and maritime patrol, environmental monitoring, and chemical, biological, radiological, nuclear, and explosives (CBRNE) detection.

Goldman Sachs is very positive on this company in the defense sector, noting that the defense business is primarily short-cycle and bookings have started to recover. FLIR’s commercial business has substantial long-term growth potential. It has close to the highest margins and cash return on cash invested in the firm’s defense sector coverage.

The Thomson/First Call consensus price target for the stock is $35.31. The shares closed most recently up over 5% at $30.31.