While at the Turnaround Letter we focus on longer-term turnarounds, usually with 2-3 year horizons, we occasionally will look at stocks selling at unusual discounts for temporary reasons. The recent sell-off related to the Coronavirus appears to be one of these opportunities.
The rapid spread of the illness has shut down much of China, which some fear may develop into a global economic slowdown. This has pressured stocks of economically sensitive companies, including oil and copper producers and some global industrial companies. Similarly, it has pressured stocks of travel-related companies including airlines, cruise ships and casinos.
Concerns over these risks has led investors to quickly sell exposed stocks, with many down 15%-25% or more in a very short period of time. Yet, as the virus relents to increasingly aggressive world health interventions, these risks seem overly discounted.
Listed below is a basket of 13 stocks that appear to have been oversold and provide short-term rebound opportunities. The stock price changes reflect declines since the close of January 16th, the last day prior to the start of the Coronavirus selldown. All of the stocks have readily liquid shares that trade on either the NYSE or Nasdaq.
