Maybe things have gotten so bad they can only get better from here. Forward returns are historically more positive when investors turn this bearish, Bespoke Investment Group found. The latest survey from the American Association of Individual Investors , showed 52.9% of investors are bearish and just 26.9% are bullish. That's a spread of 26 percentage points. "Probably the most bullish indicator we can find right now is just how bearish everyone is," read a Friday report on stock market pros and cons from Bespoke Investment Group. "It's usually when no one can find anything positive on the horizon that bottoms are made." Contrarians believe that when everyone is so bearish, they've already sold so perhaps a market turn is near. In the past, stocks on average gained 0.34% one month after bears outnumbered bulls to this degree, Bespoke found. The average forward performance on the S & P 500 jumped 1.6% three months out, 3.3% six months out, and 6.4% one year later. To be sure, a bevy of macroeconomic risks show no signs of letting up on the equity markets. Rising commodities prices, aggressive monetary policy tightening from the Federal Reserve, and an ongoing war in Ukraine continue to add pressure to stocks. Still, Bespoke believes a "massive amount of pain" has already been priced in. "Who knows when it will happen, but one day soon we expect investors to go shopping for 'on sale' prices that will cause a rally that lasts longer than just a few days," the note read. If you are in a contrarian mood, CNBC PRO looked to find the most hated stocks. These names could lead an upturn If investor sentiment does turn. Our screen surfaced stocks that have been cut in half, yet a majority of analysts still say the shares are not a buy, according to FactSet data. For some investors, these stocks could prove to be contrarian plays: Investor sentiment took a disastrous turn for one-time tech darling Netflix . The streaming company triggered a wave of selling after reporting it lost subscribers in its most recent quarterly report. The firm is looking into a crackdown on password sharing, and is considering adding advertising to boost the business. Still, the streaming company is 74% off its recent highs, and has just one out of four analysts recommending it as a buy. Several downtrodden health-care companies could be helped by a reversal of sentiment. The sector, which is trading at a "near-record discount" to the S & P 500 , offers investors "growth, defense and yield" at a reasonable price, according to Bank of America analysts in a note last week. Illumina 's stock price is down 53% from its peak and has just 26% of analysts recommending the stock. Moderna 's stock price is 73% off its recent highs, and has just 29% of analysts issuing buy ratings. Biogen 's stock price has tumbled 59% from its peak, and has 41% of analysts recommending it as a buy. Consumer services companies Wynn Resorts and Warner Bros. Discovery have taken a beating on Wall Street. Shares of Wynn Resorts are down 52% off their recent peak, with just three out of 10 analysts recommending the stock. Shares of Warner Bros. Discovery are down 55%, with 46% of analysts issuing buy ratings. Other stocks that surfaced in this list include human resources services company Ceridian HCM and laser equipment supplier IPG Photonics . To be sure, if market sentiment continues to worsen, these stocks could continue to be under pressure.
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Maybe things have gotten so bad they can only get better from here.