Companies across all sectors of the market have been unleashing their earnings and the major fluctuations in the market recently have reflected that. Many corporations that revealed less than favorable earnings saw a sharp decline in share prices from finicky investors. That creates an opportunity for more risk focused investors looking to get into the market when share prices are low and hope for higher earnings in the second quarter and for the year. Whether suffering from reverberations from the disaster in Japan, higher energy costs or weak consumer confidence early in the year a number of companies have lost significant value on news unrelated to the true health or future prospects of the business. These companies have the potential to bounce back once investor attitude changes or more optimistic earnings reports are released.
Here are three companies investors to pay attention to.
American Superconductor (NASDAQ: AMSC)
American Superconductor has been hard hit over the last month, declining upwards of 40 percent. The company relies heavily on Sinovel to purchase its products. Sinovel is a major wind turbine vendor for China and the market is growing. China recently announced plans to rely even more heavily on wind power in the coming years. That’s good news for Sinovel and potentially American Superconducter, who would directly benefit from the rise in orders. Right now, with the plans for more turbines in China only in its early stages the company feels they are sitting on an excess of super conductor inventory. Once production ramps up; however, order numbers will increase as will the share prices of American Superconductors presumably.
Considering how low share prices are right now, if the company goes back to previous levels on higher order numbers, investors could nearly double their investment. Alternately, the company is being seen as somewhat dangerous to investors as a result of their reliance on a single client for much of their revenue.
Boeing (NYSE: BA)
Trading of aerospace leader Boeing has been understated this year on investor worry that the company’s new aircraft the Dreamliner will never be manufactured or that by the time it is Chinese innovators will have already developed a comparable model for less money. Either way, the completion of the Dreamliner has been long awaited and many investors simply haven’t had the patience.
The company; however, despite doubt among investors has been busy with a surge in orders that can be expected to produce higher earnings and push shares higher. Should the Dreamliner release or Boeing’s earnings turn significantly higher, the company may experience major gains in share prices. For the past 12 months, Boeing has rise only 1.7%, sharply below the S&P’s 13% improvement.
Southwest Airlines (NYSE: LUV)
Shares of Southwest took a beating when several of their 737’s encountered structural difficulties that could have been potentially life threatening. Still many investors may have pulled away from shares of the stock too early, as they company later discovered only a small amount of their fleet had been affected.
This difficult, coupled by extremely high flight prices, pushed up by sky-high fuel costs, have led to lower volume on the airline and inherently, lower share prices. With the economy improving; however, and the busy summer travel season ahead, it can be expected that Southwest’s volume problem shouldn’t last for too long. It could take sometime for the shares to improve significantly, with the consumer spending being eaten up by fuel costs, but people need to fly and its unlikely gas prices can maintain current levels without damaging other sectors.
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