Quoting Ron Burgundy, “well that escalated quickly.” The BREXIT vote went from staying in the EU, to leaving the EU fairly quickly and caught a lot of investors by surprise. It’s easy at times like this to panic and sell everything. While I’m not against any investor choosing to do so, buying might be the better play here. I’m not against selling. In fact, before the vote was finalized I planned on selling a bunch of stock to capture gains. Not out of fear, but to have more cash ready to buy back the same stocks at a discount. Sadly, I ran out of the time and the markets closed. I hate that U.S. markets close early in the day for investors on the west coast. This post highlights the biggest BREXIT losers in my portfolio. By losers, I mean the stocks that saw large price drops and are now potential buying opportunities or at a least worthy watchlist stocks.
BREXIT Aftermath – Buying Opportunities
After the dust settled yesterday, my portfolio lost close to $6k in market value. Where did it go? Here are the biggest losers from yesterday’s trading session.
AMGN – Amgen Inc
Amgen has been on a slide recently. Yesterday, Amgen reacted poorly to the BREXIT vote. At market close AMGN was down 3.82%, closing at $146.45. The stock is down 9.78% YTD. Morningstar ranks AMGN at 5-stars, with a fair value price of $194. S&P Capital IQ ranks AMGN 4 of 5 stars with a 12-month price target of $214, and fair market value of $168.10.
Finbox shows Amgen with 21% upside and a price target of $177.
Fast Graphs tells a different story. Per the graph below, Amgen’s price needs to fall further to enter the value zone.
GILD – Gilead Sciences
It’s no secret that I love this stock. GILD was my pick stock of 2016. We’ll so far that’s not been the case. As a DG investor, I’m totally fine with this because I get to DRIP an undervalued stock. GILD has been the poster child of the Democratic party attacks on biotech. It’s all noise. GILD is a fantastic company and the stock is now cheap.
GILD fell 3.48% yesterday, closing at $80.47. This recent drop took GILD to a YTD price drop of 20.48%.
Morningstar ranks GILD at 5-stars, with a fair value price of $124. S&P Capital IQ ranks GILD 4 of 5 stars with a 12-month price target of $155.
Finbox shows Gilead with 13% upside and a price target of $91.62
Fast Graphs is in agreement with other analysts. Per the graph below, Gilead Sciences is seriously undervalued.
AMP – Ameriprise Financial
Ameriprise fell like hammer yesterday. At market close AMP was down 10.22%. YTD, AMP is down 14.19%.
Morningstar ranks AMP at 3-stars, with a fair value price of $100. S&P Capital IQ ranks AMP 3 of 5 stars with a 12-month price target of $100.
Finbox shows AMP with 13% downside and a price target of $81.54.
Fast Graphs disagrees with analyst opinions and shows AMP as moderately undervalued.
MET – Metlife Inc
It’s been a rough year for Metlife. This stock is down YTD 18.19%. Yesterday the stock fell 10.71% and closed at $39.44.
Morningstar ranks MET at 4-stars, with a fair value price of $50. S&P Capital IQ ranks MET 4 of 5 stars with a 12-month price target of $50.
Finbox shows Metlife with 11% upside and a price target of $44.82. Fast Graphs shows MET as slightly undervalued.
CSCO – Cisco Systems Inc
Cisco dropped 5.02% yesterday, closing at $27.75. YTD, CSCO is still up 2.19%. Cisco has been on a good run lately. If you’re a DG Investor and feel like you missed Cisco before its recent price run, we’ll now’s your second chance to buy shares.
Morningstar ranks CSCO at 3-stars, with a fair value price of $27. S&P Capital IQ ranks CSCO 4 of 5 stars with a 12-month price target of $31.
Fast Graphs shows CSCO as slightly undervalued. Finbox. shows Ciscowith 26% upside and a price target of $35.21.
MGA – Magna International Inc
Magna dropped 9.82% yesterday. This wiped out the gains that MGA has slowly made in 2016. YTD, MGA is now down 10.80%.
Morningstar ranks MGA at 4-stars, with a fair value price of $46. S&P Capital IQ ranks MGA 5 of 5 stars with a 12-month price target of $57. Finbox doesn’t rank MGA.
Fast Graphs shows MGA as slightly undervalued against its normal P/E Ratio.
Other Notable Post BREXIT Price Drops
Yesterday was a down day for most stocks, but not all. Of the stocks I own, MO and O were up. I expected Realty Income Corp to go up, but MO was a surprise. I suspect this increase is due to exposure areas of MO. Philip Morris (PM) is the MO counterpart stock that suffered yesterday. PM closed down 4.11%. Other stocks in my portfolio that saw good-sized price drops:
CMI – 7.11%
IBM – 5.64%
TROW – 5.33%
Most of my portfolio stocks were down at least 3%, but the stocks above saw the largest movement.
It will likely be a bumpy road the next few weeks. I’m guessing markets will slide early next week, then start to see small gains. Overall, the next 30 to 60 days we should see some value opportunities appear. Now is a good time to sell OTM puts and in some cases OTM covered calls. This is a good way to collect easy premium income or buy shares on serious slides.
One thing to keep in mind is that the historic BREXIT decision is not over. The UK is looking at a 2-year time-table for EU exit. This means there is plenty of time for UK residents to change their minds and overturn the legislation. BREXIT may also lead to other EU member states to consider leaving the EU. Paying close attention to EU legislation is a good way to take advantage of upcoming market gains and losses.
Disclaimer – This post is not a recommendation to buy or sell any securities. I’m writing about price movement and price changes in my personal portfolio. If you’re looking to invest, talk to financial experts first.
Long – CSCO, GILD, MET, AMGN, IBM, TROW, CMI, AMP, MGA
Are you looking at any stocks to buy? Which stocks in your portfolio saw the biggest losses?