The old adage of “throwing the baby out with the bathwater” has happened year in and year out to good stocks when tax-loss selling season arrives. This year’s selling may have been exacerbated by worries over big capital gains taxes on the way. Many top stocks that have been hit hard may be some of the best bargains for investors looking to reset portfolios for 2022.
In a new Raymond James research report, equity strategist Travis McCourt screened the firm’s coverage universe looking for stocks rated Strong Buy or Outperform that have underperformed the S&P 500 by 10% or more in the past two months and are down 30% or more from their highs. The report notes that it is difficult to be sure if the selling is pandemic related, with worries over economic reopening after the Omicron variant arrived on the scene, or just true tax-loss selling.
Here we focus on the large-cap names that the Raymond James team spotlighted, and these five stocks look extremely attractive at current levels. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Activision Blizzard
This remains a top gaming pick on Wall Street, and with the holiday shopping season in full swing, this could be a very solid idea now. Activision Blizzard Inc. (NASDAQ: ATVI) develops and publishes online, personal computer (PC), video game console, handheld, mobile and tablet games worldwide.
The company develops and publishes interactive entertainment software products through retail channels or digital downloads and downloadable content to a range of gamers. Its legacy franchise Call of Duty continues to be hugely popular.
Investors receive just a 0.81% dividend. The Raymond James price target on Activision Blizzard stock is $90, though the consensus target is higher at $93.62. The stock closed on Monday at $58.09 a share.
Delta Air Lines
This stock consistently has ranked high with Wall Street and, after a stiff reversal, looks like a great bargain now. Delta Air Lines Inc. (NYSE: DAL) provides scheduled air transportation for passengers and cargo in the United States and internationally.
Its domestic network is centered on core hubs in Atlanta, Minneapolis-St. Paul, Detroit and Salt Lake City, as well as coastal hub positions in Boston, Los Angeles, New York-LaGuardia, New York-JFK and Seattle. Its international network is centered on hubs and market presence in Amsterdam, London-Heathrow, Mexico City, Paris-Charles de Gaulle and Seoul-Incheon.
The carrier sells its tickets through various distribution channels, including its website and the Fly Delta app, online travel agencies, traditional brick-and-mortar agencies and other agencies. It also provides aircraft maintenance, repair and overhaul services, as well as vacation packages to third-party consumers, aircraft charters and management programs.
Raymond James has a Strong Buy rating and a $58 price target. The $53.68 consensus target on Delta Air Lines stock is also well above Monday’s closing share price of $38.14, after a 6% gain on the day.
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