This past year was great for investors. Granted, there were some bumps and bruises along the way, with inflation, rising interest rates, a regional banking crisis and troubling geopolitical issues. But there was also plenty to get excited about and even more to get excited about with turnaround stocks in 2024.
The Nasdaq, for example, gained about 44% in 2023 — all as tech stocks rocketed higher on the artificial intelligence (AI) story. The S&P 500 gained about 25% for the year. And the Dow Jones Industrial Average nailed a new all-time high of 37,557.
However, this is just the start. While we could see a good deal of volatility in 2024 with the election, markets could see higher highs. Plus, the Federal Reserve said it could cut interest rates three to four times in 2024. That’s even better news for some of these potential turnaround stocks.
Albemarle (ALB)
Albemarle (NYSE:ALB) was clobbered in 2023. However, after falling from about $290 to around $112, the lithium stock is showing big signs of life again.
Sure, lithium supply issues forced lithium spot prices lower, taking some of our favorite lithium stocks down with it. But we have to consider that, moving forward, supply won’t be able to keep up with demand.
Albemarle “expects global lithium demand to exceed supply by 500,000 metric tons in 2030. Various consultancies and other producers have slightly different projections, but all warn of a looming shortage,” reported Reuters.
First Solar (FSLR)
I just mentioned First Solar (NASDAQ:FSLR) a day ago as one of the three solar stocks you’ll regret not buying. But I also like it as a potential turnaround trade heading into 2024. That’s because of the potential for three to four upcoming interest rate cuts. In fact, it’s already starting to push aggressively higher on that assumption, last trading at $172.66 from a recent low of $130.
Remember, higher interest rates even kept consumers from installing solar, leading to lower revenues for companies like First Solar. However, rate cuts could open the solar panel floodgates and help solar company revenues recover.
Plus, as I mentioned on Dec. 19, “Morgan Stanley (NYSE:MS) just upgraded FSLR to an overweight rating, with a $237 price target. They argue the solar stock as a ‘near-term competitive moat’ as a vertically integrated U.S.-based solar-panel maker.”
Bristol Myers Squibb (BMY)
I also see better days ahead for turnaround stocks like Bristol Myers Squibb (NYSE:BMY). After a pitiful outing in 2023 that saw BMY plummet from about $75 to a low of $48.25, the stock is showing signs of life. Last trading at $52.11, I’d like to see BMY initially refill its bearish gap around $56 and eventually run back to $62 in 2024.
Helping, insiders seem to be confident a bottom may be in place. On November 20, for example, director Theodore Samuels paid $423,400 for 8,500 Bristol Myers shares. Then, on November 28, CEO Chris Boerner bought 3,071 shares for about $150,000.
Better, while we wait for BMY to recover, we can collect its yield of 4.61%. BMY just recently boosted its dividend to 60 cents, payable Feb. 1 to shareholders of record on Jan. 5. Plus, the company just boosted its buyback program by $3 billion. According to Seeking Alpha, that move is “further reflecting [the] company’s commitment to returning capital to shareholders and enhancing overall value for investors.”
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
