2 Contrarian Buys With Massive Potential
In a bear market, it's easy to be pessimistic about stocks and to expect the worst. But assuming that things will progressively get worse is just as illogical as assuming that a company will keep on growing at a high rate when times are good. That's why focusing on the long term is the safer strategy, as that can shift focus away from the short term and the problems at hand today.
Two stocks that investors are overly bearish on right now are Teladoc Health (NYSE: TDOC) and Alibaba Group Holdings (NYSE: BABA). In the past 12 months, both stocks have crashed more than 40% while the S&P 500 has declined just 7%. But if you're willing to take on some risk and be a contrarian investor, you could earn some great returns from buying and holding these stocks and going against the grain.
Down a whopping 77%, Teladoc has been one of the worst-performing growth stocks of the past year. Although the business is still growing, investors are likely having a hard time getting past the $9.6 billion the company has written off its books through the first six months of the year due to goodwill impairment charges. It's an awful number to see given that Teladoc's entire market cap right now is barely half that figure, around $5.5 billion.
Source Fool.com