As we have discussed in detail, the 2016 market sell-off is one that is trading more on worries than reality. With market metrics as bad as the dark days of 2008 and 2009, and investor sentiment and negativity right there as well, savvy investors have a chance now to take advantage of lows in the market not seen in over two years.
In a recent research note from the analysts at SunTrust Robinson Humphrey, the focus in on three stocks to buy that have been marked down huge due to a variety of reasons. While all three are more suitable for aggressive accounts, they still could provide the kind of strong upside move to introduce alpha into suffering 2016 accounts. All are rated Buy at SunTrust.
Pioneer Natural Resources
Many Wall Street analysts love this stock as a pure crude oil play, and recently it was upgraded by Deutsche Bank and Citigroup. Pioneer Natural Resources Co. (NYSE: PXD) engages in the exploration and production of oil and gas in the United States. The company produces and sells oil, natural gas and natural gas liquids. It has operations primarily in the Permian Basin in West Texas, the Eagle Ford Shale play in south Texas, the Raton field in southeastern Colorado and the West Panhandle field in the Texas panhandle.
This company is a huge player in the Permian basin and the Eagle Ford, and it owns more than 20,000 locations in the world’s second largest oil reservoir in the Midland Basin. Wall Street analysts were very positive on the third-quarter results and noted that the company reiterated annual production growth guidance of 15% or more while cutting the number of rigs expected to operate. With a stellar balance and the new capital from a recent secondary offering, the company is poised to remain the number one player in the Permian.
Pioneer announced fourth-quarter earnings recently and posted an adjusted loss that was smaller than the Wall Street analysts’ consensus estimate. Revenues also came in slightly higher than street expectations.
Pioneer investors are paid a tiny 0.07% dividend. The SunTrust price target is a stunning $175, and the Thomson/First Call consensus figure is $165.21. Pioneer shares closed trading on Friday at $115.36.
Pennsylvania Real Estate Investment Trust
This top real estate investment trust (REIT) has been hammered, and the SunTrust team sees a ton of value in this income-producing company. Pennsylvania Real Estate Investment Trust (NYSE: PEI) is a publicly traded REIT specializing in the ownership and management of differentiated shopping malls.
Headquartered in Philadelphia, the company owns and operates over 27 million square feet of retail space in the eastern half of the United States with concentration in the Mid-Atlantic region’s top Metropolitan Statistical Areas. Since 2012, the company has driven a transformation guided by an emphasis on balance sheet strength, high-quality merchandising and disciplined capital expenditures.