The 5 Most Oversold Stocks in the S&P 500 (and What to Do with Them)

Oversold stocks (especially those that are extremely oversold) are appealing to a variety of investors.

On the one hand, you’ve got the deep value buyers who are looking to scoop up distressed shares of companies that are trading below what the business is expected to be worth over the long haul (companies trading at negative enterprise values, for instance, or simply a price that doesn’t reflect the enduring value of the business itself).

On the other hand, you’ve also got short-term technical traders looking to capitalize on a snap-back in shares that have fallen far more than whatever catalyst or bit of news justifies.

Either strategy is viable, and whether one (or both, or neither) appeals to you likely comes down to your personal investing style.

We’ve previously written about how to find bargain stocks using price multiples and valuations, so today, let’s explore how to find oversold stocks using a simple screener.

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For this screen, we’ll be looking at S&P 500 stocks that are trading with a Relative Strength Index (RSI) value below 30.

RSI is a momentum indicator (not to be confused with Relative Performance, something that Mike Cintolo cites frequently) that compares the price performance of shares on up days vs. down days and is measured on a scale of 0 to 100.

Stocks trading with RSI readings above 70 are generally considered “overbought,” and those trading with RSI readings below 30 are considered “oversold.”

As always, it’s important to remember that momentum indicators can show overbought/oversold conditions for a long time if there’s a strong trend in place.

In other words, simply finding a stock with an RSI reading below 30 doesn’t mean it’s a buy. By that same token, you shouldn’t sell a stock that’s riding a powerful bullish uptrend just because the RSI gets above 70. (This will become clearer when we look at individual stocks below.)

This screen identified seven stocks, but we’ll focus only on the five most oversold stocks from our results (ordered from most to least oversold).

The Five Most Oversold S&P 500 Stocks

Keurig Dr Pepper (KDP)

KDP fell off a cliff in late August on news that the company will be acquiring JDE Peet for 15.7 billion euros.

After the acquisition, the company will then split into two smaller companies, one of which will house the combined coffee brands and the second of which will hold the other beverage assets (you can find more details in the company press release in the link above).

Acquiring companies typically fall on news of acquisitions due to the cash or equity outlays and growing pains (plus operational redundancies) that arise from integrating the company they’re buying.

As you can see in the chart, the RSI immediately dropped from nearly overbought territory straight into oversold territory.

But this is a good example of stocks that become oversold staying oversold, which you can see in the end of October 2024. Shares fell more than 10%, entered oversold territory on the RSI, and then fell another 4.7% in the next two weeks.

Between the end of October and early 2025, a divergence in the RSI developed, where persistently lower share prices were met with higher and higher RSI values. That type of divergence is a good technical clue that shares could be poised to rebound.

At this point, we don’t have any evidence of a rebound (at least from the perspective of the RSI), so you’re best off waiting on KDP if you’re trading on technical alone.

Hormel Foods (HRL)

HRL dropped off at the end of August on news that it was revising its 2025 earnings guidance lower due to higher commodity prices and supply chain issues.

As with KDP, RSI isn’t sending any clear evidence that shares are poised to bounce back in a meaningful way, and, given the high rates of undocumented workers in the agricultural and meatpacking industries, it’s safe to presume that labor-related challenges may remain in place for some time.

That said, as a defensive play, HRL may be worth adding to your watch list if you’re concerned about a weakening U.S. economy.

Kellanova (K)

Kellanova, a spin-off from Kellogg’s that holds a number of well-known snack brands as well as the former company’s international cereals division, is a bit of a special situation.

Mars Inc. (formerly M&M Mars, and which merged with gum company Wrigley) offered to acquire shares of Kellanova at $83.50 apiece back in August 2024.

Since then, K shares have risen (or fallen) based on the likelihood that the merger clears regulatory hurdles.

In June, the FTC found no issue with the merger, but the European Commission is still reviewing the deal.

In situations like this, you need to throw technical analysis out the window entirely. The share price will move based on the odds of a deal’s approval.

Constellation Brands (STZ)

Constellation Brands is an alcoholic beverage purveyor that we wrote up a few months ago after news broke that Warren Buffett’s Berkshire had taken a new position in the company.

You can read our assessment at the time at the link above, but the long and short of it is that changing consumer tastes and a secular decline in alcohol consumption (especially by young consumers) made this stock a stay-away.

Our view on the matter hasn’t changed since.

The selloff of the last few days comes on the heels of lower forward guidance, as well as concerns that the immigration crackdown (at least per Constellation) is hurting demand among the company’s predominantly Hispanic consumer base.

That may be true, or it may be a convenient boogeyman to blame declining sales on; either way, the company’s fortunes look unlikely to improve anytime soon.

Dollar Tree (DLTR)

Dollar Tree is making an appearance on this list due to an 8% selloff after the company reported a beat-and-raise quarter but warned that tariffs could be an ongoing drag on the company’s margins.

It’s also the only stock on this list that’s coming off a period of notable strength, as shares are up 34% in 2025 alone.

You can also see the RSI divergence in play, but on the overbought side of the ledger, as the higher share price in August was marked by a lower high on the RSI.

There’s a strong case to be made that middle- and lower-income consumers are continuing to up their spending at dollar stores (beat-and-raise quarter, after all) and that actions by the court systems could make tariffs a moot point.

If that’s the case, this may turn out to be a good example of a stock that’s in an upward trend oscillating down into an oversold level before continuing on its merry way.

None of these oversold stocks is a screaming buy, but DLTR looks like the best of the bunch.

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