Stocks to buy

3 Stocks Poised to Make a Comeback

Even in a bull market, not all stocks move higher at the same time. Given the fact that the economy is large and diverse, stock price action comes in the form of sectoral preferences or company-specific catalysts. It’s also important to note that a stock trending lower or remaining sideways in a bull market does not necessarily indicate weak fundamentals. For quick returns, investors can focus on beaten-down or underperforming names that represent good businesses and are potential comeback stocks.

This article focuses on three comeback stocks likely to trend higher in the next few quarters. While the upside in blue-chip stocks can be moderate, the growth stocks discussed are likely to double in the next 12 months.

I must add here that the investment horizon for these comeback stocks can potentially be beyond 2024. As a matter of fact, the first two blue-chip stocks are worth holding for the next five years. Let’s discuss the reasons to be bullish on these comeback stocks.

Chevron Corporation (CVX)

Chevron (CVX) on a gas station roof.

Source: Denis Kuvaev /

Chevron Corporation (NYSE:CVX) stock has not witnessed a sharp correction. However, CVX stock has remained sideways and trades at a valuation gap. I believe the stock is poised for a strong comeback with a breakout on the upside.

With production cuts by OPEC and allies coupled with geopolitical tensions, Brent trades at $90. I expect oil to remain firm in 2024 with potential rate cuts being additional positive catalysts. Over the next 12 months, CVX stock could potentially deliver 30% to 40% in total returns.

It’s worth noting that Chevron has an investment-grade balance sheet. Further, with robust operating cash flows, the company intends to invest $14 to $16 billion annually. That will ensure healthy reserve replacement. In the last 10 years, Chevron has reported reserve replacement ratio of 99%. Additionally, the company has high financial flexibility to make big investments in the low-carbon business.

AT&T (T)

A man sits on his couch looking at his smartphone.

Source: Sfio Cracho /

AT&T (NYSE:T) stock has declined by 18% year-to-date. The stock however looks massively undervalued at a forward price-earnings ratio of 6.4. Further, considering the company’s quarterly numbers, T stock is likely to be among the best comeback stocks to buy.

For Q3 2023, AT&T reported healthy growth in postpaid phone and fiber subscribers. With some big investments in the last five years in the wireline and wireless network, AT&T is positioned to benefit. The company already has a strong 5G network in the United States.

It’s also worth noting that AT&T reported operating cash flow of $26.9 billion for the first nine months of 2023. That implies an annualized OCF potential of $36 billion. AT&T is therefore well positioned to make aggressive investments and pursue continued deleveraging.

Earlier this year, it was also reported that AT&T is looking to sell its cybersecurity division. Any potential sale of the business will help in improving its credit metrics.

Riot Platforms (RIOT)

In this photo illustration, the Riot Platforms (RIOT) logo is displayed on a smartphone screen.

Source: rafapress /

It’s been a year of high volatility for Riot Platforms (NASDAQ:RIOT). From levels of $3.4 in January, RIOT stock skyrocketed to highs of $20.6 in July. With the renewed correction of Bitcoin (BTC-USD), the stock has plunged to $8.8. I believe that current levels are attractive for fresh exposure. I would bet on RIOT stock doubling from current levels in the next few quarters.

There are two important reasons to be bullish on Bitcoin. First, the halving event is due in 2024, which could trigger a rally. Further, the Bitcoin ETF seems to be in the cards and will be positive for the digital asset. Additionally, possible rate cuts in 2024 will support the bull case for cryptocurrencies.

Riot Platforms has strong fundamentals with a zero-debt balance sheet and cash (including digital assets) of $510 million. That will support the company’s plans for aggressive mining capacity expansion. Riot expects to boost its hash rate from 10.7EH/s in Q3 2023 to 35EH/s by 2025. Massive capacity expansion coupled with Bitcoin trending higher would imply robust cash flows.

On the date of publication, Faisal Humayun did not hold (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 Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.