When navigating a changing business cycle, such as today's triggered by the Federal Reserve (the Fed) cutting interest rates, investors should focus on fundamentals and keeping a risk-to-reward profile that favors their portfolios in the coming quarters. For this reason, stocks that trade near their 52-week lows are a great place to start looking for potential value and recovery plays.
There are those who believe that stocks will trade down for a reason, and while they may be right, that isn't always the case; otherwise, value investors like Warren Buffett would have been out of business a long time ago. Fitting the list of 52-week low stocks are names like FedEx Co. (NYSE: FDX) after a recent earnings sell-off to represent the transportation sector, coupled with another transport stock being beaten down for a while now, and Boeing Co. (NYSE: BA).
To diversify away from the transportation sector, which is highly tied to the business cycle, investors can look to the energy sector, this time at a Buffett favorite. Shares of Occidental Petroleum Co. (NYSE: OXY) are down despite the news of Buffett buying out, and that creates enough of a sentiment divergence for investors to start digging into the possibility of a pending recovery.
Why FedEx Stock Has No Reason to Stay at Its Lows Today
After the company reported a slower-than-expected quarter, FedEx stock crashed lower by as much as 17% from its previous highs. However, many market participants felt comfortable with buying the dip, as judged by the quick recovery, which brought the stock higher ...
