3 best contrarian stocks to buy now
It is not uncommon for investors to miss out on their best profit opportunities due to fear over a company’s financial statements. Make no mistake, it is essential that you do your due diligence on any stock you want to buy. However, the stock market performance of a company is linked to its future potential, even if the evidence of pass is the main source of information for many investors.
It can be misleading to look at past financial data when a business is at a crossroads in its growth. It would be like using only your mirrors while driving. Today, let’s take a look at why a struggling airline, a company with promising treatment for Alzheimer’s disease, and an electric vehicle battery recharging company are among the top growth stocks with exciting catalysts to come, even though. their financial statements show some red flags.
1. American airlines
American Airlines Group (NASDAQ: AAL) the stock became a bargain after the coronavirus pandemic decimated its core business in 2020. Last year, the company’s revenue fell 62.1% from 2019. Simultaneously, its Operating loss amounted to over $ 10 billion compared to income of $ 3.07 billion in 2019. But what makes it a buy now?
The coronavirus pandemic could dissipate faster than expected. The Biden administration is on track to distribute coronavirus vaccines to all American adults by the end of July. Depending on fares from other countries, global travel demand could return to normal by 2022. Trading at just 0.6 times revenue, American Airlines is incredibly cheap given that the company could see its sales and shifts. earnings pick up (and more) over the next 24 months.
American Airlines has one of the world’s largest and most efficient airline networks. Last year, when it couldn’t carry people, the company made money using its passenger fleet for cargo deliveries only. It has successfully completed 5,200 such flights and delivered 167 million pounds of supplies around the world.
The airline also saw savings of $ 1.3 billion that will continue after the pandemic ends. American Airlines is also modernizing its fleet to include the new Boeing 737 Max and Airbus A321 models in the coming year. Right now, the company has $ 14.3 billion in total cash to withstand operations until threats posed by the virus abate. For investors looking for stocks with immediate or short-term rebound potential, American Airlines is a fantastic choice.
2. Cassava science
With a market cap of $ 1.9 billion, no income produced, and an estimated operating loss of $ 25 million for 2021, many investors are probably wondering how Cassava science (NASDAQ: SAVA) could possibly be considered a higher growth stock. Well, the secret sauce lies in its pipeline. You see, it’s been almost two decades since the United States Food and Drug Administration approved an Alzheimer’s disease drug. To date, there is no cure for the disease, let alone a treatment that can slow its progression. Cassava seeks to change that.
Its investigational treatment, simufilam, will be ready for phase 3 clinical trials by the end of the year. In phase 2 clinical trials, 98% of patients who took the drug saw improvements in biomarkers associated with Alzheimer’s disease, with impressive gains in episodic and spatial memory compared to a placebo.
Another open study verified these results, in which patients taking simufilam saw a 10% improvement in cognitive abilities and a 29% improvement in associative symptoms such as anxiety, delusions, and agitation. While this may not seem like much, one way forward is for the company to combine simufilam with current benchmark drugs for Alzheimer’s disease, such as donepezil, for synergistic effects.
At present, cassava is fairly well capitalized, with over $ 280 million in cash on its balance sheet for further investigation. That’s a lot considering its cash usage will only be $ 20-25 million this year. Considering the multibillion dollar market opportunity, if successful, this is definitely a solid biotech that you should add to your watchlist.
3. Flashing charge
Similar to cassava, Flashing charge (NASDAQ: BLNK) has a large market capitalization ($ 1.3 billion), negligible product revenue and an operating loss. Nonetheless, I think his stock is an exciting investment. It turns out that Blink Charging is laying the groundwork for an electric vehicle charging network across the country.
So far, it has deployed more than 9,600 residential charging stations and 5,700 commercial stations in 40 states. There are over 190,000 members registered for its services.
By the end of the decade, Bloomberg predicts the number of electric vehicles in the United States will increase to 13 million, from 1 million today. This is a huge total addressable market, and that’s exactly what Blink Charging needs to be successful commercially. Currently, its charging stations are compatible with all-electric vehicle models across North America, including those manufactured by You’re here (that’s right, an adapter is needed). Investing in infrastructure is a long-term investment that pays big dividends, making Blink Charging an intriguing stock to buy and hold.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.