Investors typically seek to capitalize on market momentum. However, identifying opportunities amongst stocks currently out of Wall Street’s favor can prove a shrewd strategy. Rather than chasing gains in highly appreciated names, some of the most compelling investment prospects may lie with contrarian stocks, despite Wall Street’s cold shoulder.
This contrarian approach warrants consideration, as Wall Street isn’t always right. Last year was a testament to how economic forecasts of imminent recession did not ultimately materialize. Yet, innovation in tech and Artificial Intelligence (AI) drove indices higher against expectations of monetary tightening and dampening performance. Many previously contrarian stocks staged meaningful recoveries in the final quarter despite Wall Street’s cold shoulder.
With indices in 2024 recording fresh highs in quick succession, bullish sentiment is focused on capitalizing further on already extended stocks. However, select underperformers may represent attractive buying opportunities, holding potential for rebounds or appreciation as broader market participation expands.
Renowned investor Warren Buffett’s axiom rings true: Be “fearful when others are greedy and greedy when others are fearful.” Scrutinizing contrarian stocks despite Wall Street’s cold shoulder could uncover names warranting optimism from a value perspective.
Below, we take a contrarian approach to reveal three contrarian stocks despite Wall Street’s cold shoulder currently overlooked.:
Warner Bros Discovery (WBD)
The film-production and streaming giant Warner Bros Discovery (NASDAQ:WBD) is one of the top contrarian stocks despite Wall Street’s cold shoulder. WBD has seen its shares fall 25% this year, as markets expect the company to continue experiencing negative results in the first half of the year. However, even pessimistic analysts acknowledge it is set for a rebound in profitability later in 2024.
After Warner Bros merged with Discovery in 2022, its shares were trading at $24.08 but have since lost 64% of their value. While the contrarian stock sold off in the first two months of this quarter, it stabilized through March. Its 14-day relative strength index (RSI) has also become neutral.
The recent launch of its Max streaming service, combined with the company’s scale and extensive library of valuable intellectual properties (such as Superman, Game of Thrones and Harry Potter), means the contrarian stock could experience an upside despite Wall Street’s cold shoulder once the negative impact of the recent writers’ strike diminishes.
Plug Power (PLUG)
The hydrogen fuel cell company Plug Power (NASDAQ:PLUG) is another pick of the top contrarian stocks despite Wall Street’s cold shoulder. PLUG has struggled to convince investors of late, with its shares trading lower over the course of 2024 following considerable volatility in prices. At $3.23 per share, the stock is well down from its pandemic-era peak above $60 when it was swept up as a “meme stock”.
Despite Wall Street’s cold shoulder, Plug Power has remained committed to developing the green hydrogen economy. Recently, it deployed its first large-scale megawatt product following a $1.6 billion loan from the U.S. Department of Energy (DOE). This presents an opportunity for those with a more optimistic view of the emerging clean technology space.
While analysts remain circumspect over the company’s prospects, the average target price sits at $6.22 per share, nearly double the current valuation. Though sentiment has turned cold, Plug Power’s positioning in hydrogen power makes it one of the contrarian stocks despite Wall Street’s cold shoulder.
VF Corporation (VFC)
VF Corporation (NYSE:VFC) is the final pick in this consideration-list of contrarian stocks despite Wall Street’s cold shoulder. The parent company of such iconic brands as Vans and The North Face has seen its share price decline by 25% in 2024 as investors worry that rising inflation could negatively impact demand for branded clothing. VFC’s recent financial results also fell below analyst expectations, further dampening sentiment and resulting in its removal from the S&P 500 index. However, this could represent an opportunity as the challenges of the past quarters recede.
With inflation appearing to moderate and the resilience of the U.S. consumer continuing, VFC’s well-established brands remain well-positioned to benefit as economic conditions stabilize. For long-term investors seeking contrarian stocks despite Wall Street’s cold shoulder, the current pessimism means VFC’s share price may now better reflect its underlying fundamentals and growth prospects.
On the date of publication, Stavros Tousios did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.