It’s simply days till Christmas, and in the spirit of the holiday 2 traders analyzed a few possible equipping stuffers: Stocks that trade for less than $25 a share that have outshined this quarter.
A few of those names include General Electric, Under Armour, American Airlines, Hewlett Packard Enterprises, and retailer Space.
Mark Tepper, president of Strategic Wealth Partners, stated the majority of those stocks look more like lumps of coal than presents.
“It is difficult to get delighted about a lot of these,” Tepper told CNBC’s “Trading Nation” on Tuesday. “When it comes to GE, I take a look at GE as a business with an id. They have no idea who they wish to be, what they desire to do, so it’s not something I want to own.”
When It Comes To American Airlines, he said he’d choose what he sees as the better-managed Delta. Hewlett Packard has taken advantage of a pull forward in computer sales that will slow down, he stated, and Gap has battled with sales at some of its franchises, including the Banana Republic.
There is one stock on the list he sees as one to see, though.
“The just one where I think there’s some potential is Under Armor, which’s really since I enjoy completion market. I enjoy athleisure, I enjoy sports,” said Tepper. “It is the turn-around story in a very appealing end market, however, they have had their issues.”
Before Tepper can leap in, he said, he needs to see a dedication to development at the business as well as more stability in management. The stock is down 20% this year.
Katie Stockton, a creator of Fairlead Techniques, stated all 5 names have the potential for long-lasting turnarounds. Nevertheless, she stated she fears the first quarter might show challenges for these quarterly high flyers.
“These names are extremely highly off of their lows. Of course, the names are long-lasting laggards, however, they’re not likely to surpass in the near term provided that January impact, which does tend to favor stocks that lagged all the way through mid-December,” Stockton said during the very same “Trading Nation” section.
GE has rallied 73% this quarter, Under Armour 52%, American Airlines 30%, Hewlett Packard Enterprises 25%, and Space 19%. Those gains put them at risk of underperformance in January as investors rotate out of the winners and into stocks that had weak performances in December, said Stockton.
From a technical perspective, however, these stocks are developing out multi-year turnarounds.
“They’ve finished long term-based breakouts. These base breakouts that we’ve seen in the likes of GE bode well for a long term at least involvement if not likewise outperformance. It’s really part of that rotation from … growth to a worth that we saw during November, which was significant, so it could mean greater costs for these names beyond the near term,” stated Stockton.