A handful of stocks are getting no love from Wall Street analysts, but Wolfe Research told investors to watch out for a potential turnaround in the underperforming names. "One of the areas we currently find interesting to look for new stock ideas are those companies that have underperformed and currently have < 40% analyst buy ratings, but exhibit traits that we think may be indicator of a turnaround," Wolfe Research chief investment strategist Chris Senyek wrote to clients. Potential turnaround signals could be things like a CEO change, positive changes in cash flow generation or accelerating earnings growth, Senyek said. Wolfe screened for its potential "unloved stocks with favorable signals" by looking for stocks that have buy ratings from less than 40% of the analysts who cover it. They also need to be underperforming their industry over the past 12 months. Plus, the group has triggered at least two of the firm's turnaround signals. Take a look at the list here: Consumer staples Colgate-Palmolive , Clorox and Kellogg are down 8%, 43% and 22%, respectively, relative to their industry in the past 12 months. Of the analysts covering Colgate, just 38% rate the stock as a buy, according to Wolfe. Clorox and Kellogg have buy ratings from 24% and 30%, respectively, of the analysts covering them, the data shows. However, Wolfe notes the three consumer companies have announced CEO changes in recent years. The firm also noted that Colgate-Palmolive and Kellogg's earnings have been accelerating. Chip stock Intel has suffered lately, with its stock down about 43% over the past 12 months relative to its industry. Only about a third of the analysts covering Intel recommend buying the stock. However, the company's new CEO announced that the old Intel is "back" in the first quarter, which could signal the company is ripe for a turnaround. Intel CEO Pat Gelsinger announced plans for two new chip factories in Arizona that will allow Intel to produce chips for other companies at a time where the global semiconductor supply chain is a growing area of concern. On Friday, the Wall Street Journal reported that the Intel is in talks to acquire GlobalFoundries for roughly $30 billion. Information technology company Cloudera also got a new CEO in 2020. Cloudera has struggled as a public company since holding its IPO in 2017. The company, along with Hortonworks, came to the market as a leader in commercializing the open-source analytics technology called Hadoop. Cloudera and Hortonworks merged at the beginning of 2019 in what ended up as a $3 billion deal. But as competition ramped up in the cloud database and analytics market from companies like Amazon, Microsoft, Google and Snowflake, Cloudera's stock has suffered. Financial companies Marsh & McLennan Companies , Northern Trust Corp , CVB Financial Corp and TriCo Bancshares earned spots on Wolfe Research's hated stocks that are due for a turnaround list. Shares of Marsh & McLennan Companies are down 32%, shares of Northern Trust Corp are down 10%, shares of CVB Financial Corp are down 42% and TriCo Bancshares is off by 7% relative to their industries in the past 12 months. Wolfe also noted that no more than 33% of analysts like any of the names. However, the Wall Street firm sees potential in the financial names due to executive shakeup and a pickup in earnings growth. AT & T , Fastenal and Kinder Morgan also earned spots on Wolfe Research's "unloved stocks with favorable signals" list. — with reporting from CNBC's Michael Bloom.
Colorox brand toilet bowl cleaner sits on display at a supermarket in Princeton, Ill.
Daniel Acker | Bloomberg | Getty Images
A handful of stocks are getting no love from Wall Street analysts, but Wolfe Research told investors to watch out for a potential turnaround in the underperforming names.