Investors can benefit from playing these contrarian plays, also known as "out on a limb" stocks, said Jeff Utz, managing director and U.S. equity products manager at Credit Suisse.
The Contrarian Play:
Best Buy —“It’s at the peak negativity on the Street—you’ve got about 15 sells and holds on the name,” Utz told CNBC. “They’re losing share to Amazon.com and TV fundamentals are difficult.”
But there are upsides ahead for the electronics retailer, according to Utz.
“They’re closing poor-performing stores, halting store development in countries where the economics don’t make sense and they have a good product cycle with smartphones as well as tablets.”
What to Avoid:
Mohawk —“This is a name where we think margins are heading lower; and if you look at oil prices, there’s a big negative correlation between oil prices and margins for Mohawk."
"And we think the stock could test $50 or even lower in the next six to 12 months,” he said.
Scorecard—What He Said:
- Utz's Previous Appearance on CNBC (Oct. 5, 2010)
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CNBC Data Pages:
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Utz does not own shares of BBY, IGT, EMR, TEX, CIEN or MHK.