This past year has been a wild ride for the stock market.
And it is mostly due to the pandemic that has caused sharp market movements, double-digit gains in some stocks, and an increase in retail trading.
While the entire market was impacted by the pandemic, stocks in industries like restaurants, retail, commercial real estate, and airlines weren't as lucky as the tech names that saw their prices soar to record highs and into bubble territory.
As a matter of fact, shares of renowned names like Apple and Amazon saw increases of up to 70% in their share prices in 2020. Tesla's stock went up 740% that same year.
But as many continue to crowd into the tech sector, it opens up an opportunity to invest in some of the unloved sectors that are primed to rebound this year.
With the increasing prospect of the economy reopening this year on the back of two immensely effective vaccines and one offering good protection, stocks in the airline and REITs sectors have the potential to make a comeback and rise.
In a Feb. 9 note, Raymond James strategist Tavis C. McCourt said that around 58% of airlines and 89% of REITs that the firm covers still trade below their pre-COVID enterprise value, which is a more comprehensive valuation gauge than market cap.
He and his team found names in "'center of the storm' industries" that are expected to generate a total return of at least 15% over the next 6 to 12 months. To put that it into perspective, according to Goldman Sachs, the S&P 500's annual average return in the past 10 years is 13.6%
These are the 12 names excluding the hard-hit REITs sector with strong buy ratings that Raymond James sees significant price upside in as the economy reopens.
1. SkyWest
Ticker: SKYW
Sector: Airline
Stock price change needed to return to pre-covid EV levels: 59%
Expected to outperform the S&P 500
Source: Raymond James
2. Alaska Air
Ticker: ALK
Sector: Airline
Stock price change needed to return to pre-covid EV levels: 25%
Expected to outperform the S&P 500
Source: Raymond James
3. Boston Scientific
Ticker: BSX
Sector: Medical Device
Stock price change needed to return to pre-covid EV levels: 19%
Expected to outperform the S&P 500
Source: Raymond James
4. Couche-tard Class B
Ticker: ATD.B
Sector: Consumer Defensive
Stock price change needed to return to pre-covid EV levels: 13%
Expected to outperform the S&P 500
Source: Raymond James
5. ARKO
Ticker: ARKO
Sector: Consumer Cyclical
Stock price change needed to return to pre-covid EV levels: 12%
Expected to outperform the S&P 500
Source: Raymond James
6. AutoZone
Ticker: AZO
Sector: Consumer Cyclical
Stock price change needed to return to pre-covid EV levels: 4%
Expected to outperform the S&P 500
Source: Raymond James
7. National Retail Properties
Ticker: NNN
Sector: Real Estate
Stock price change needed to return to pre-covid EV levels: 33%
Source: Raymond James
8. Healthcare Realty
Ticker: HR
Sector: Real Estate
Stock price change needed to return to pre-covid EV levels: 19%
Source: Raymond James
9. Four Corners Property Trust
Ticker: FCPT
Sector: Real Estate
Stock price change needed to return to pre-covid EV levels: 16%
Source: Raymond James
10.
Ticker: ADC
Sector: Real Estate
Stock price change needed to return to pre-covid EV levels: 15%
Source: Raymond James
11. Gaming and Leisure Properties
Ticker: GLPI
Sector: Real Estate
Stock price change needed to return to pre-covid EV levels: 14%
Source: Raymond James
12. VICI Properties
Ticker: VICI
Sector: Real Estate
Stock price change needed to return to pre-covid EV levels: 6%
Source: Raymond James