Some of the greatest opportunities can be found in turnaround stocks — especially if it’s a large, respected stock that’s down temporarily.
Look at Palo Alto Networks (NASDAQ:PANW), for example. A few weeks ago, the cybersecurity giant gapped from about $360 to a low of $260. All after the company dropped its revenue and billings guidance for fiscal year 2024.
But the pullback was overkill. For one, analysts said the pullback was an overreaction to a misunderstanding. Two, the stock managed to catch and hold support at its 200-day moving average, while becoming oversold on RSI, MACD and Williams’ %R. And three, cybersecurity issues were still making major headlines.
A few days later, PANW jumped from $260 to a high of nearly $328. The best part — there are plenty of turnaround stocks just like PANW. In fact, I spot opportunities just like these every day. Here are three to consider, for example.
Cameco (CCJ)
Source: shutterstock.com/RHJPhtotoandilustration
Uranium prices are at 16-year highs thanks to massive supply and demand issues. All of which is great news for uranium stocks, like Cameco (NYSE:CCJ).
On one side, we have one of the world’s biggest producers of uranium, Kazatomprom warning it “will produce only 80% of its permitted maximum uranium output allowed under Kazakh subsoil usage contracts, instead of the previously announced 90% level, due to difficulties procuring sufficient levels of sulfuric acid,” as noted by S&P Global.
On the other side, demand for uranium is exploding, especially with global leaders agreeing to triple their nuclear capacity by 2050. American Nuclear Society said:
“A major factor behind the bullish outlook is that the demand for uranium in Western markets (excluding Russia)—currently at approximately 200 million pounds—is about 40 million pounds greater than the radioactive metal’s supply. Furthermore, market analysts project an average supply deficit of 35 million pounds per year over the next decade.”
As we all learned in Econ 101, little supply and growing demand equals higher prices. All of which is great news for turnaround stocks, like Cameco. If you pull up a one-year chart of CCJ, you can clearly see CCJ is now consolidating at support, and is just starting to pivot from over-extensions on RSI, MACD and Williams’ %R.
Barrick Gold (GOLD)
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We can also look at Barrick Gold (NYSE:GOLD), which is just starting to pivot from double-bottom support just under $14 a share. It’s also starting to pivot from over-extensions on RSI and MACD, as well. From its current price of $15.44, I’d like to see it initially refill its bearish gap around $17.50 a share. For one, investors are flocking to gold, which last traded at $2,083.
Two, gold demand is expected to hit another record this year, as central banks continue to buy the safe haven, according to the World Gold Council. “Central-bank buying maintained a breakneck pace, with annual net purchases of 1,037 tons last year, just 45 tons shy of the record set in 2022, the WGC said in the report. It expects central-bank buying to top 500 tons this year,” added Bloomberg.
Even millionaires and billionaires are flocking to gold over concerns of dollar devaluation and the potential for economic collapse. Such comforting news, huh?
Albemarle (ALB)
Source: IgorGolovniov/Shutterstock.com
We can look at hot turnaround stocks, like Albemarle (NYSE:ALB) again, too.
The last time I mentioned ALB, it traded at around $120 on February 26. At the time, I noted, “with cuts to its demand forecast, falling lithium prices, and plummeting electric vehicle sales now priced in, the stock is ridiculously oversold. And, as other investors run scared from ALB on all that news, it’s time to buy the blood in the streets.”
As hoped, fear is giving way to greed, as ALB shares get bid higher on speculation that lithium prices are finally bottoming out. That would explain why ALB just hit a high of $142.80.
Helping, Sociedad y Quimica (NYSE:SQM) CEO Ricardo Ramos expects for lithium prices to remain stable this year, and for sales volumes to improve.
Even better, Australian lithium company Pilbara (OTCMKTS:PILBF) just said it’s seeing buying interest again, too. “All our customers, for avoidance of doubt, are taking their product and, in some cases, asking for more,” said Pilbara Minerals’ Managing Director Dale Henderson, as noted by Bloomberg.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
