In the stock market, performance is never certain. Companies can experience many factors that limit share price growth, and these aren’t always related to the core business. Political factors, market conditions, and even general investor confidence can all send stock prices plummeting. This doesn’t always mean that an underperforming stock is not a great investment.
These two stocks have underperformed in 2018 but could now be prime for investment, especially if you’re the type of investor who likes to take some risk at the bottom of the market.
Underperforming 2018 Stocks:
Avis Budget Group Inc. (NASDAQ: CAR)
Despite being on one of the strongest indexes, Avis has underperformed this year. YTD growth is -20.99%, but the 12-month growth is still a positive 22.94%. Stock prices have performed better in the last five days compared to most of the year, growing 6.61%.
Avis has grown company revenue by a modest amount for the past five years. Financially, they’re in a good position. While they don’t grow as fast as some companies on the stock market, their business model is proven and there is a constant demand for rental car and vehicle services. Now could be the perfect time to buy, because lower than expected prices make Avis a relatively affordable stock that still has long term potential.
Oshkosh Corp. (NYSE: OSK)
-19.18% growth in 2018 is not a figure that gets many investors excited, but there’s more behind Oshkosh stock that could make it a good investment this month. Figures over a full year are more promising, with 7.26% growth, meaning that longer term investors are still in the green. For investors that get in on this stock now, there could be better days on the horizon.
The last five days have seen this stock turn a corner, with modest 3.96% stock price growth. The financials are more impressive, with the company growing revenue by 8.77% in the last reported year. Gross income went up 19.37% in the same period.
Oshkosh had difficulty from 2014 to 2016 with a period of weakening sales but has since turned things around. The company is now in a better financial position and orders have been growing at a steady rate. There could be a full turnaround incoming, and lower stock prices after seven months of decline make OSK a good option for investors willing to take on some risk.
The Safest Stocks Aren’t Your Only Option
Traditional growth stocks are inherently safer than volatile stocks, but they don’t always offer the largest returns. If you’re younger and able to take some risk with your investments, then underperforming (but promising) stocks like the two covered here can make a lot of sense.
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