Market watchers have been reluctant to bottom out in global equities sell-off this year, but some assets now look oversold and could be ripe for a rebound. The stock market has slipped into a bear market in the first half of this year amid fears that an overly aggressive rate-hike cycle will spark an economic downturn in the US and beyond. But there is some good news in store for investors, with research showing that a small bounce of relief could be a long time coming, regardless of the fundamental picture. What actions would these be? To identify the names, CNBC Pro used data from FactSet to search for MSCI World stocks that appear ripe for a rally. These stocks trade at the greatest discount to their average price over the past 200 days. 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 selecting 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 that the stock is moving in larger increments than the market itself in day trading, implying a higher probability of a larger move relative to the broader market during the rebound. They are also rated buy by most analysts, with average growth potential of at least 10% over the next 12 months, according to data from FactSet. Stocks that made up the screen Nearly a third of the 54 stocks that made up the screen were financial stocks. The list includes two private equity giants: Blackstone and KKR & Co. Both stocks are trading at more than 20% of their 200-day averages. They are also among several firms that have bid for troubled Japanese conglomerate Toshiba in a deal that could fetch $22 billion at the higher end of the range, according to a Reuters report. Several US financial services firms also made the screen, including Wells Fargo, Charles Schwab, SVB Financial, Apollo Global Management and Carlyle Group. Charles Schwab and SVB Financial had also previously appeared on CNBC Pro’s bank screen, doing well during the Federal Reserve’s 1994 rate-hike cycle, when the central bank nearly doubled its main policy rate by 6% in seven quick increases. Both firms are also expected to increase their net interest income this year and could see their share prices rise, according to data from FactSet. Unsurprisingly, a host of semiconductor stocks made the list. After years of market-beating returns, semiconductor stocks have taken a beating this year. The iShares Semiconductor ETF, or SOXX, which tracks the performance of semiconductors, is down more than 30% so far this year. Taiwan’s Nan Ya PCB and investor favorite Nvidia are trading at 40% and 32% of their 200-day averages, but analysts have given the stock an average growth potential of 54.3 % and 40.5%, respectively. Advanced Micro Devices, ASML, and Qualcomm are trading at discounts of more than 20% to their 200-day averages. Two car manufacturers also made the screen. Electric vehicle giant Tesla is trading 22.6% from its 200-day average, but analysts have given the stock upside potential of 39.6%. The Texas-based automaker’s share price has been hit by, among other things, looming job cuts, uncertainty over CEO Elon Musk’s Twitter deal, and his latest comments on new factories in Germany. and Texas that are losing “billions of dollars right now.” Automaker Stellantis also made the list, with the stock trading 22.1% off its 200-day average. A slew of material stocks also appeared on the CNBC Pro screen. They include Swiss specialty chemicals firm Sika, French manufacturer Compagnie de Saint-Gobain, Arizona-based mining giant Freeport-McMoRan and Indian mining firm Vedanta. Other stocks that made the list include MGM Resorts, ad-tech company Trade Desk and entertainment ticketing company Live Nation Entertainment.
Oversold global stocks that analysts believe are ripe for a rally
