The market may be hitting new all-time highs, but many stocks aren’t going along for the ride. That’s creating some value plays for investors. Stocks with beaten down prices offer better valuations than high-flying stocks.
Plus, beaten down stocks can also offer investors a great dividend as well. That pays investors well to wait for a recovery. Once that happens, investors can potentially earn years of returns in a short period of time.
One beaten down name right now is conglomerate 3M (MMM). The manufacturer of everything from air filters to office supplies just beat on earnings, but shares sold off anyway.
The move lower has taken shares to 11 times earnings. Plus, the stock pays a hefty 5.5 percent dividend right now.
3M is coming off some legal issues that weighed shares down, and revenues slid nearly 4 percent last year. But with the big issues out of the way, the deck is cleared for shares to trend higher.
Action to take: Investors may want to build a position here, and look to buy on any further weakness in the share price.
For traders, the April 2024 $105 calls, last going for about $1.05, could see high double-digit returns or better on a relief rally for shares in the coming weeks following the steep earnings-day drop.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.