Bob Frick, the author of the Casualty List, has identified four stocks that he believes have good recovery potential: United States Steel Corp. (X), Humana Inc., Universal Corp. (UVV), and G-III Apparel Group Ltd. (GIII). U.S. Steel, once a major player in the steel industry, saw its stock fall by 16% in the first quarter. The company’s future is uncertain, with talks of a potential sale to Nippon Steel. Despite this, Frick believes U.S. Steel has the potential for moderate gains, especially if a takeover occurs.
Humana, a health insurance company specializing in Medicare and Medicaid patients, saw its stock drop by 24% in the first quarter. The company faced challenges such as a cyberattack and rising healthcare costs, leading to a loss in the fourth quarter of 2023. However, Humana has a track record of profitability and Frick believes it can bounce back. The stock currently sells for 41% of per-share revenue, with potential for growth if it returns to historical ratios.
Universal Corp., a tobacco company based in Richmond, Virginia, experienced a 23% decline in its stock in the first quarter. Despite the decreasing global demand for cigarettes, Universal Corp. has been a consistent dividend payer for 54 years. While investor interest in the company is low due to its stagnant revenue growth, the stock offers a 6.1% dividend yield, making it an attractive pick for income investors.
G-III Apparel Group, a clothing manufacturer, saw its stock drop by over 13% in the first quarter. The company has a strong track record of profitability over the past decade, making it an attractive pick for value investors. With a price/earnings ratio of about 8, Frick considers G-III to be in bargain territory compared to its historical median ratio of 17.
Frick has been compiling the Casualty List since 2000, offering investment ideas that have shown promising returns over the years. While his picks from a year ago performed poorly compared to the market index, the Casualty List has outperformed the S&P 500 over the long term. Frick cautions that his column results are hypothetical and should not be confused with his actual client results. He also discloses that he has no personal or client holdings in the stocks discussed in the article.
In conclusion, Frick’s Casualty List highlights four stocks that have been battered in the market but have good recovery potential. Investors looking for opportunities in undervalued or overlooked stocks may find his recommendations to be valuable. Despite the uncertainties and challenges facing these companies, Frick believes that they have the potential for future growth and profitability.
