You don’t have to be a stock market historian to know that many times over the years great companies have slipped, and they were promptly taken out to the woodshed. The pundits may move away from supporting a company for many reasons: bad earnings, cutting the dividend, changes in top management and a host of other reasons. One thing is for sure, and that is patient investors that scoop up good stocks that have fallen on tough times are often rewarded in a big way. Ask those that bought Apple in 2009 at $12.50.
We screened our 24/7 Wall St. stocks database looking for some companies that have been absolutely eviscerated, and we found five that may offer patient investors some real bargains.
This was the first smartphone-type company, but it was buried when Apple released the iPhone. BlackBerry Ltd. (NYSE: BB) continues transitioning from a mobile hardware provider to a mobile-focused security software and services company. Its portfolio of products includes BlackBerry Secure Unified Endpoint Management, crisis communication, corporate asset tracking, cybersecurity services and other secure collaboration software and communication technologies.
The company also licenses its brand/IP for mobile devices and its QNX business provides leading embedded software systems. BlackBerry recently named Bryan Palma as president and chief operating officer. Palma was most recently Cisco’s senior vice-president and general manager of customer experience for the Americas. Before joining Cisco, he was the vice-president of cyber and security solutions at Boeing.
Macquarie has a Buy rating and a huge $12.50 price objective. The Wall Street consensus target is $10.31, and the shares closed trading on Friday at $9.18.
This company offers solid value, has zero foreign sales exposure, but was crushed when it cut its dividend. 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 integrating well and things looking up for the company, the dividend cut was somewhat of a surprise as the company has more than enough free cash flow to cover it. However, executives made the tough decision so they could focus on paying down the large debt load.
Note that the chief executive officer and the chief financial officer of the company made some huge insider purchases after the stock was mauled.
CenturyLink investors are still paid a solid 8.65% dividend. Morgan Stanley has a Buy rating and a target price of $16, while the consensus price objective is $14.07. The stock closed trading at $12.30 on Friday.
This is a solid value play now, and demand could jump with a trade deal with China paving the way. Ford Motor Co. (NYSE: F) is one of the world’s largest vehicle producers, with over 6 million units manufactured and sold globally. The company has made significant progress executing on its One Ford plan and delivering best-in-class vehicles.
The company also remains committed to positioning itself well within the evolving auto industry through balanced investments across electrification, autonomy and mobility services.