Ben Carlson is one of my favorite finance bloggers. Recently, Carlson lamented about how the bull market of almost nine years has made it extremely difficult to find bargain stocks to buy. As a result, dumpster diving has become virtually impossible.
The trick, according to Carlson, is to figure out how much of a potential bargain’s bad news is priced into its current valuation. That’s no easy task.
“When dumpster diving for beaten-down shares, you must be able to understand how far divorced fundamentals have become from investor expectations,” Carlson suggests. “While there were bargains galore in early 2009, late 2011 and even early 2016, if you want to find value in these markets, you have to go dumpster diving.”
Further, he adds, “you have to expect that anything going down big has to come with some baggage.”
Carlson has laid out six industries and asset classes that have performed miserably over the past three years. Here are seven beaten-down stocks to buy now, at least one from each of them.
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