{"id":12117,"date":"2023-08-16T02:22:30","date_gmt":"2023-08-16T02:22:30","guid":{"rendered":"https:\/\/isafespend.com\/investing\/harley-spotify-and-8-other-dead-stocks-that-could-come-alive\/"},"modified":"2023-08-16T02:22:30","modified_gmt":"2023-08-16T02:22:30","slug":"harley-spotify-and-8-other-dead-stocks-that-could-come-alive","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=12117","title":{"rendered":"Harley, Spotify, and 8 Other ‘Dead’ Stocks That Could Come Alive"},"content":{"rendered":"
\n
\n

<\/p>\n

\n
<\/div>
\n

United Airlines is one of the companies where analyst sentiment is improving.<\/h4>\n


\n Bruce Bennett\/Getty Images
\n <\/span>
\n <\/figcaption><\/figure>\n<\/p><\/div>\n

Stocks that have done nothing for years are often called dead money by investors. Many dead money stocks are value traps that lure investors in only to frustrate them. But there are a few turnaround candidates that can perform strongly, and Barron\u2019s<\/em> is using a stock screen to predict which dead money stocks are ready to come alive. <\/p>\n

\n

The recent lead-coated telecom cable issues reported on by The Wall Street Journal<\/em> have thrown into sharp relief the issue of dead money.
\n Verizon
\n (ticker: VZ) and
\n AT&T
\n (T) shares are down 11% and 16%, respectively over the past three months, leaving both with single-digit price-to-earnings ratios and near-8% dividend yields. Tantalizing, but those two have lost investors about 4% a year on average for the past five years while the
\n S&P 500
\n and
\n Dow Jones Industrial Average
\n have returned about 11% and 9% a year on average, respectively.<\/p>\n

Are they ready to turn around though? Wall Street doesn\u2019t think so. About 19% of analysts covering Verizon stock rate shares a Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. What\u2019s more the Buy-rating ratio for Verizon shares is essentially unchanged over the past year. Not a very compelling case for a turn. <\/p>\n

The metrics for
\n AT&T
\n stock look similar although 30% of analysts covering its shares rate them a Buy, a little higher than Verizon. <\/p>\n

Other stagnant stocks are more promising. Barron\u2019s<\/em>\u00a0looked at stocks in the
\n Russell 3000 Index
\n that have done, essentially, nothing for the past five years and identified 10 stocks where improving analyst sentiment could signal better days ahead. <\/p>\n

The 10 in no particular order are: motorcycle maker
\n Harley-Davidson
\n (HOG), packaged food maker
\n TreeHouse Foods
\n (THS), biotech firm Biocryst P
\n harmaceuticals
\n (BCRX), investment bank
\n Lazard
\n (LAZ), lawn care giant
\n Scotts Miracle-Gro
\n (SMG), biotech
\n Biogen
\n (BIIB), lubricant maker
\n Quaker Chemical
\n (KWR), trust bank
\n Bank of New Your Mellon
\n (BK), music streaming service
\n Spotify Technology
\n (SPOT), and
\n United Airlines
\n (UAL). <\/p>\n

Average annual returns for the group for the past five years have ranged from a 1% gain to an 8% loss. Not very good, but analysts are warming up to the names. The average Buy-rating ratio for the 10 is now about 62%, up 19 percentage points from 43% over the past year. <\/p>\n

\n

<\/p>\n

\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Company \/ Ticker<\/th>\nMarket Cap (bil)<\/th>\nRecent Price<\/th>\n2024E P\/E<\/th>\nBuy-Rating Ratio W%<\/th>\nYear-Ago Ratio<\/th>\n<\/thead>\n
Harley-Davidson \/ HOG<\/b><\/td>\n$4.9<\/td>\n$34.76<\/td>\n7.0<\/td>\n56%<\/td>\n35%<\/td>\n<\/tr>\n
TreeHouse Foods \/ THS<\/b><\/td>\n2.7<\/td>\n47.68<\/td>\n16.2<\/td>\n57<\/td>\n43<\/td>\n<\/tr>\n
Biocryst \/ BCRX<\/b><\/td>\n.4<\/td>\n7.14<\/td>\nn\/a<\/td>\n64<\/td>\n42<\/td>\n<\/tr>\n
Lazard \/ LAZ<\/b><\/td>\n3.9<\/td>\n34.4<\/td>\n9.4<\/td>\n56<\/td>\n44<\/td>\n<\/tr>\n
Scotts \/ SMG<\/b><\/td>\n2.9<\/td>\n51.44<\/td>\n14.3<\/td>\n64<\/td>\n40<\/td>\n<\/tr>\n
Biogen \/ BIIB<\/b><\/td>\n39.5<\/td>\n272.74<\/td>\n16.6<\/td>\n71<\/td>\n48<\/td>\n<\/tr>\n
Quaker \/ KWR<\/b><\/td>\n3.1<\/td>\n169.87<\/td>\n19.5<\/td>\n67<\/td>\n50<\/td>\n<\/tr>\n
Spotify \/ SPOT<\/b><\/td>\n27.1<\/td>\n139.38<\/td>\nn\/a<\/td>\n61<\/td>\n50<\/td>\n<\/tr>\n
BONY \/ BK<\/b><\/td>\n35.2<\/td>\n45.18<\/td>\n8.9<\/td>\n59<\/td>\n39<\/td>\n<\/tr>\n
United \/ UAL<\/b><\/td>\n17.2<\/td>\n52.31<\/td>\n4.4<\/td>\n68<\/td>\n42<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

E=estimate<\/p>\n

Sources: Bloomberg, FactSet<\/p>\n<\/div><\/div>\n<\/p><\/div>\n

For the most part, the 10 is a list of value stocks. The average price to estimated 2024 earnings is about 12 times, below the market\u2019s 18 times multiple. That shouldn\u2019t surprise investors. Dead money stocks often have low PE ratios, another thing that tantalizes investors before they realize the stocks are cheap for a reason because of, say, peak profits in a cyclical industry or because of a declining business. <\/p>\n

Why the Street is getting more positive on the stocks isn\u2019t easy to identify. Few of the 10 have increasing earnings estimates, a positive sign for stocks. United and Quaker, however, are seeing analysts take earnings estimates for 2024 higher.
\n Lazard
\n has some management changes pending. New CEOs and top managers can be a signal to reevaluate stocks. TreeHouse took up full-year 2023 financial guidance when it reported second-quarter numbers in early August. <\/p>\n

Why the Street is getting more optimistic is beside the point. Overall, things are looking better to analysts, the ones paid to follow the companies closely. <\/p>\n

A stock screen, of course, is only a start to narrow the possible list of new investments. After a screen is when the real work of investing begins. <\/p>\n

Write to Al Root at allen.root@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

United Airlines is one of the companies where analyst sentiment is improving. Bruce Bennett\/Getty Images Stocks that have done nothing for years are often called dead money by investors. Many dead money stocks are value traps that lure investors in only to frustrate them. But there are a few turnaround candidates that can perform strongly,<\/p>\n","protected":false},"author":1,"featured_media":12118,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[],"class_list":{"0":"post-12117","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nHarley, Spotify, and 8 Other 'Dead' Stocks That Could Come Alive | iSafeSpend<\/title>\n<meta name=\"description\" content=\"United Airlines is one of the companies where analyst sentiment is improving. 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