Market watchers have been hesitant to call the bottom of this year’s sell-off in global equities, but some assets now appear to be oversold – and may be ripe for a rebound. The stock market plunged into a bear market in the first half of this year on fears that an overly aggressive rate hike cycle will cause an economic downturn in the US and beyond. But there is some good news for investors, as research shows that a small rebound in relief may be long overdue, whatever the fundamentals. Which shares would that be? To identify the names, CNBC used Pro FactSet data to look for MSCI World stocks that appear ripe for a rebound. These stocks are trading at the largest discount to their 200-day average price. This metric is known as the 200-day moving average – a key indicator used by traders and market analysts to determine long-term market trends. The list is then further narrowed down by looking for stocks that are more volatile than the index. The remaining names have a 3-year historical beta greater than 1. “Beta” is a measure of a stock’s volatility; A beta greater than 1 means the stock is moving in larger increments than the market itself in daily trading – implying a higher probability of a larger move relative to the broader market during the rally. According to FactSet data, they are rated Buy by a majority of analysts with an average upside potential of at least 10% over the next 12 months. Stocks That Made the Screen Nearly a third of the 54 stocks that made the screen were financials. The list includes two private equity giants — Blackstone and KKR & Co. Both stocks are trading at more than 20% off their 200-day moving average. They are also among several firms that have made bids for troubled Japanese conglomerate Toshiba, according to a Reuters report. Several US financial services firms were also on screen, including Wells Fargo, Charles Schwab, SVB Financial, Apollo Global Management and Carlyle Group. Charles Schwab and SVB Financial also previously appeared on CNBC Pro’s screen of banks that did well during the Fed’s 1994 rate-hiking cycle, when the central bank nearly doubled its main interest rate to 6% in seven rapid hikes. Both companies are also likely to grow their net interest income this year and could see upside potential for their share prices, according to FactSet data. Not surprisingly, a number of semiconductor stocks made the list. After years of above-average returns, semiconductor stocks have taken a hit this year. The iShares Semiconductor ETF, or SOXX, which tracks the performance of semiconductors, is down more than 30% year-to-date. Taiwan’s Nan Ya Printed Circuit Board and investor favorite Nvidia are trading up 40% and 32% from their 200-day moving average, respectively, but analysts gave the shares average upside potential of 54.3% and 40.5%, respectively. Advanced Micro Devices, ASML, and Qualcomm are all trading at discounts of more than 20% to their 200-day moving averages. Two automakers also made the screen. Electric vehicle giant Tesla is trading at 22.6% from its 200-day moving average, but analysts give the stock a potential upside of 39.6%. The Texas-based automaker’s stock price has been hit by looming job cuts, uncertainty over CEO Elon Musk’s Twitter deal, and his recent comments about new factories in Germany and Texas that are “currently losing billions of dollars,” among other things. Automaker Stellantis also made the list, with the stock trading at a 22.1% discount to its 200-day moving average. A variety of material stocks also popped up on CNBC Pro’s screen. These include Swiss specialty chemicals company Sika, French manufacturer Compagnie de Saint-Gobain, Arizona-based mining giant Freeport-McMoRan and Indian mining company Vedanta. Other stocks that made the list include MGM Resorts, advertising technology company Trade Desk, and entertainment ticket sales company Live Nation Entertainment.
Oversold global stocks which analysts believe are ripe for a rebound
