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2 No-Brainer Turnaround Stocks to Buy for 2023By Jeremy Bowman – Dec 26, 2022 at 5:10AMKEY POINTS
Nike is posting strong growth, even in a challenging macroeconomic environment.
Redfin shares should rebound when the housing market stabilizes.
10 stocks we like better than Nike
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Here are a pair of stocks that look oversold going into 2023.
There's no question about it: 2022 has been a wipeout for the stock market. With just a few days left in the calendar, 10 out of the 11 market sectors are down for the year, with energy being the lone exception.
Inflation and rising interest rates torched the stock market this year, reining in the zealousness of the pandemic era.
While 2023 is likely to bring some more uncertainty to the market, there are also a number of stocks down sharply this year that are well positioned for a comeback. Here are two of them.
1. Nike: Getting its groove back
Nike (NKE -0.39%) has long dominated the sportswear industry, becoming one of the most valuable apparel and footwear companies along the way.
However, 2022 threw several curveballs at the company, including supply chain challenges earlier in the year, COVID lockdowns in China, and bloated inventory levels more recently due to anticipation of supply chain delays that didn't materialize.
As a result, Nike stock is down 31% year to date, but the company's fiscal second-quarter earnings report, which it just announced, shows why the sneaker king is a good candidate for a turnaround next year.
In a challenging macroeconomic environment, Nike reported surging revenue growth, with sales up 17%, or 27% in constant currency, to $13.3 billion, well ahead of estimates at $12.6 billion. Bottom-line growth was weaker, as the company dealt with excess markdowns to clear inventory and a higher tax rate. It finished the quarter with adjusted earnings per share of $0.85, compared to $0.83 in the quarter a year ago and better than estimates at $0.65.