We’ve been hearing repeatedly that markets are overvalued, stocks are extended, and the Magnificent 7 has mostly carried the market. This may frustrate traders looking for areas of opportunity, but the new year is the perfect time to reassess and consider some unloved individual names.

Ted Weisberg, Founder & President of Seaport Securities, joined Trading 360 to discuss his ‘Lumps of Coal’ Shopping List: the names beaten up in 2024 that he’s eying now. These include Nestlé (NSRGY), Dow Inc. (DOW), Schlumberger (SLB), Intel (INTC), and CVS Health (CVS) – a wide array of sectors.

Nestlé (NRSGY), the only ADR of the group, had a rough 2024, falling nearly 30%. The Swiss company owns a plethora of brands but is known for its chocolate. Cocoa futures climbed steadily last year, ultimately hitting an all-time high of 12,931 due to a shortage. JPMorgan cites diseases, climate change, and “deep-rooted structural issues” in its farming – and those pressures aren’t likely to abate any time soon.

That’s just one commodity Nestlé needs to function, and even without any other issues, inflation is hitting on every side. Perhaps a plus, though, Nestlé announced in October that it would streamline its organization after missing sales targets. As of August, it also has a new CEO, Laurent Freixe, who analysts hope will drive innovation and bring Nestlé back to the competition.

Dow (DOW) is another conglomerate beaten up over the last year, down over 25% and hitting a 52-week low in mid-December. The company is in everything from agriculture to healthcare to oil but is battling low demand and higher input costs like everyone else. Reuters reported in October that Dow was reviewing some of its European assets, citing the weak demand and competitive regulatory policies.

With Trump coming into office on a platform of deregulation, Dow could see a boost on that optimism. However, investors should also keep in mind that Dow is taking heat for PFAS and other forever chemicals, which are becoming a bigger consumer health concern.

Schlumberger (SLB) traded steadily lower in 2024, also falling around 25%. The energy company will report its 4Q earnings on January 17. The price of crude is a major factor in its business, but the supply/demand dynamics have not been on its side. The world continues to change over to renewable energy, and Trump’s “drill, baby, drill” mantra has the market expecting a continued glut of supply. Despite this, 18 out of 25 analysts covering the stock still hold a “Strong Buy” rating, perhaps pinning their hopes on Schlumberger providing a rosier outlook.

Intel (INTC) was the unloved semiconductor stock of 2024, gapping lower after 3 out of 4 earnings reports last year, and falling almost 60%. TechRadar notes “instability problems” for its latest CPU offering, and that’s just on the consumer side – A.I. dominated the conversation in tech this year, and Intel was left behind.

Intel was even kicked out of the Dow Jones in favor of rival Nvidia (NVDA), and CEO Pat Gelsinger was forced to step down in December, according to Reuters. The company is looking for new leadership and is spinning off its foundry business, both of which could be potential positive catalysts if it can turn its organization around.

Lastly, CVS Health (CVS) collapsed around 45% last year. Health care was an unloved sector overall, and we’ve heard a number of guests say that they think it’s due for a turnaround this year as tech momentum exhausts. However, CVS is in hot water with the U.S. Department of Justice (DOJ), related to the Opioid Crisis, who filed a civil complaint alleging CVS “filled unlawful prescriptions in violation of the Controlled Substances Act (CSA). The DOJ complaint also alleges that “CVS set staffing levels far too low for pharmacists to both meet their performance metrics and comply with their legal obligations.”

Its woes could continue under the new administration, with Health Secretary nominee RFK Jr.’s avowed dislike of big pharma and skepticism of vaccines. It might not be safe on the retailer side of the business, since CVS has claimed shoplifting is growing. Still, cold and flu season is here, and CVS could see an uptick in demand during the winter months – maybe the first step to a turnaround.

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