Two stocks on the market’s ‘naughty list’ could be set for a 2022 comeback, traders say
By Keris Lahiff, CNBC
The stock market is tracking for another year of double-digit percentage gains, but some players have not joined in on the fun.
Peloton, Zoom Video, Penn National Gaming and Global Payments are among the stocks that have been relegated to Santa’s ‘naughty list,’ not just sitting out the rally but also posting steep losses for the year.
CNBC’s “Trading Nation” asked two of its traders which of the most beaten-down stocks could be setting up to rebound in the new year.
Nancy Tengler, CEO and chief investment officer at Laffer Tengler Investments, highlighted payments company Block, the company formerly known as Square. Shares have tumbled 23% this year.
“This is a company that is in the perfect space for disruption, but they seem to have faced a number of hurdles this year, not just recent regulatory concerns about ‘Buy Now, Pay Later,’ but there were worries about slowdowns in payments and as fiscal ‘stimmy’ checks began to fade,” Tengler said on Thursday.
The tailwinds for 2022 are now piling up, she says. An e-commerce partnership with TikTok and its acquisition of ‘Buy Now, Pay Later’ company Afterpay are two reasons to be bullish, according to Tengler.
Joule Financial president Quint Tatro instead is focusing on casino stock Las Vegas Sands, which is down more than 35% this year.
“Las Vegas Sands has really experienced a double whammy this year. Obviously, it’s an entertainment name that’s going to be in trouble due to Covid, but it’s also tied to China. So this stock has really been in the trash heap,” Tatro said during the same interview.
Chinese stocks and companies with exposure to the country have had a bumpy 2021 as Beijing cracked down on certain industries ranging from tech to private education amid the nation’s uneven economic recovery. Las Vegas Sands generates nearly half of its revenue from Macao, a gambling destination off the coast of mainland China.
“I do think travel and gaming will come back,” said Tatro. “This is a stock that looks fairly cheap, has been beaten up, but I think will do well in the coming years.”
Disclosure: Laffer Tengler Investments holds SQ. Joule Financial holds LVS.