Contrarian Value Ideas

[gfp927z]

TEVA has rebounded somewhat after falling briefly into the high 20s (after peaking in the high 60s last year). Not sure if the final bottom is in, but the chart is starting to look better, though it's still possible they may have to cut the dividend. Based on the chart, the near term upside target looks like the falling 200 MA (35.72), although first it might need to re-test support at the 50 MA (30.36).

Looking at some other bottom plays, TIS is still early but appears to be stabilizing just above 12 (after the drop from the high 20s). After years of steady growth they hit a bad quarter and suspended the dividend, so will be interesting to see how the next quarter looks. It's rare to see a quick turnaround after such a big drop, so may take a few quarters to see where they stand.

A few other bottom plays - after a bounce, SRCL has lost some ground again so looks like it's a work in progress and will likely need to see improving quarterly results/guidance to get back on track.

REED is near the 2016 lows and might expect a bounce off of the 2.50 area, but who knows with that one.

The automotive parts and repair sector got hit recently, so will be interesting to see what happens next with them - ORLY, MNRO, AZO. These were all stellar performers for years but have dropped sharply (30-40%) since January. Chart-wise they're still early, need to form a bottom.

General Mills (GIS) might be in the accumulation range now after falling over 20% (72 down to 56), with a 3.4% dividend. Also in the food area, Cal-Maine Foods (CALM) looks like probably a good time to accumulate. It's formed a base after dropping 35% (60 to 32), with a 4.6% dividend, although as a small cap so there's always concern about a dividend's sustainability.

Another one in the Food/Beverage sector that really got torched over the last several years is Boston Beer, down 60% since 2015 (320 to 130). I had them on a watch list but haven't really followed them much, but I know there's a lot of competition from the craft beer side. The chart looks like it may need to test key support at 100, but at some point perhaps they become attractive as a buyout (?) Here's a recent article on the company -

https://www.fool.com/investing/2017/06/19/has-boston-beer-companys-stock-bottomed-out-yet.aspx?yptr=yahoo