Every once in a while, a company may undergo a rough period financially or take a hit to its public perception. Sometimes, these maladies can persist quarter after quarter, and cause the company’s stock to tank. It’s important to remember, however, that so long as the company does not financially collapse or cease to exist, its stock can go up again. Thus, the only way to truly lose money is by actualizing the loss through selling the stock.
In such cases, buying and holding a stock when it is down in the dumps, or even just gently discounted, can be a tremendous way to grow wealth, should the company turn things around. In these cases, the analyst becomes a contrarian, deciding to go against the general narrative surrounding a particular investment opportunity. As such, here are my picks for three contrarian stocks to buy, with a focus on why they’re likely to rebound in the next decade.
Contrarian Stocks to Buy: Boeing (BA)
I have gone back and forth on Boeing (NYSE:BA) in the last four months, first recommending it, and then going back on that recommendation following further developments. The story around America’s biggest commercial aviation company has been a rollercoaster of emotions for investors and customers alike, with seemingly potential recoveries constantly being undone by the next news article about quality issues or aircraft malfunctions.
However, the reality lies somewhere in the middle. Boeing stock has continued to decline over the last four months, despite rather healthy financial reports. Much of this decline comes from fears over continued accidents and the overall public perception of Boeing’s airliners.
It’s important to remember, however, that these issues are occurring with a subset of Boeing’s 737s in the MAX 9 configuration. This aircraft does account for a substantial portion of the company’s commercial airliner revenue but pales in comparison to the company’s defense revenues and other airlines like the 777 and 787. Thus, it’s possible that once the 737 issues are resolved, either by discontinuation of the model, or improvement, Boeing will once again return to an upward trajectory.
Pfizer (PFE)
Since the end of the COVID-19 pandemic, many investors and analysts have turned away from Pfizer (NYSE:PFE). It’s easy to understand their reasoning; after all, Pfizer had its day in the sun and is now on a steady decline since its peak valuation at the height of the pandemic.
I wonder, however, why so many people are discounting the fact that the company was the largest by prescription pharmaceutical sales in 2022, clocking in at $91.3 billion. That same year, the company spent a whopping $12.38 billion in research and development. Because Pfizer specializes in prescription drugs for heart disease, cancer, and diabetes, its true target market is the aging population of the developed world.
With many developed countries like the U.S., Germany, and Japan experiencing significant increases in average demographic age, the demand for Pfizer products could see a spike in the decade to come. This would ultimately drive PFE stock back towards its 2022 peak days, making it one of the best contrarian stocks to buy today.
Paramount Global (PARA)
Despite mixed opinions on Paramount Global (NASDAQ:PARA), I still believe the company sits in a strong position to benefit from the news cycle by the end of the year. On top of that, the company was able to consistently grow the Paramount+ streaming platform over the last three years, reaching 71 million users in Q1 of 2024.
The company’s ownership of the CBS news network and PlutoTV is also worth more than investors may realize. With CBS still the second-most-watched channel in the U.S. and PlutoTV’s 80 million active users, the company commands a lot of attention.
Moreover, the company ended Q4 of 2023 with stunning financial improvements, with income rising by 2347% year-over-year. The company also exceeded EPS expectations in Q1 of 2024 by 72.88%, so I’m confident in saying that PARA will likely be on the upward trajectory soon compared to other contrarian stocks to buy.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.