Nobody wants to be beaten down, but that is exactly what I think of when I survey the current market environment. I see plenty of stocks that are beaten down. Some of these battered stocks I want to buy and some of them I want to avoid.
While the overall market has held up well, there has been a fair amount of carnage — mostly with respect to momentum stocks with lofty valuations.
The beatings have pushed some of these stocks into the value category. The declines in price are solidly in bear-market territory.
These stocks are too cheap to ignore. If this market catches a bid — which is a distinct possibility — these stocks could reverse course in a hurry.
But do ignore the “sell in May and go away” admonitions. This summer is looking more and more like the outlier where stocks go up instead of down. That rally has already begun, with stocks pushing toward historical highs.
Within a positive market environment I want to buy stocks that others are selling. As they say, there is money to be made when there is blood in the streets.
Here are three “woodshed stocks” that are clearly bloodied and are likely to shoot higher from here: