Investor concerns have yet to abate, with worries given some added impetus this week when Fed Chair Jerome Powell said that the central bank is expecting interest rates to rise to 5.1% by the end of 2023. At that rate, many economists fear that a recession is inevitable.
In fact, as a sign that recession might be on the horizon, November retail-sales data showed the biggest drop in over a year.
The immediate result was a sudden drop in stocks across the board, but the unintended consequence may be new opportunities for investors. With markets pulling back, it may just be time for investors to go bottom fishing.
So, let’s get a look at some stocks that are languishing in the doldrums. Using the TipRanks platform, we’ve pulled up details on three stocks that are down more than 40% so far this year – but that also still boast a Strong Buy rating from the Street’s analysts – and upside potential starting at 40% or better. Here’s the lowdown.
Tricon Residential Inc. (TCN)
We’ll start in the real estate business, where Tricon Residential is the largest owner/manager/operator of rental properties in North America. The company, which operates as a real estate investment trust (REIT), has a portfolio that includes over 35,000 single-family rental homes, 7,700 stabilized multi-family rental apartments, as well as over 4,200 additional apartment properties under development, across 21 US states plus the Canadian province of Ottawa. The company’s total assets under management (AUM) comes to $17.6 billion, with another $9.4 billion in third-party AUM.
The company’s financial results are driven by the SFR (single-family rental) fundamentals – the core of its business. In 3Q22, Tricon showed $170.8 million in revenue from that source, compared to $115.1 million in the year-ago quarter. The gain was built on two factors – an expansion of 29.7% year-over-year in the single-family rental portfolio, and an 11.4% y/y increase in the average effective monthly rent.
The increase in rent was a reflection of the persistent inflationary environment; but…