In this article, we will take a look at 10 most oversold S&P 500 stocks right now. To skip our analysis of the recent market activity, you can go directly to see the 5 Most Oversold S&P 500 Stocks Right Now.
The stock markets have been through the wringer in the recent past especially since March 2022 as the United States Federal Reserve began its tightening process. Despite that, major stock indices in the United States have already recuperated some of their losses in the recent past. The S&P 500 Index is up 3.07% in July and nearly 20% since the beginning of the year. Similarly, the Dow Jones Industrial Average and the NASDAQ-100 indices are up 7.1% and 45.1% year-to-date, respectively.
Several factors, including major breakthroughs in the Artificial Intelligence arena, a pause in interest rate hikes, better than expected inflation results, and resilient economic growth. The latest economic data shows that the United States economy grew at an annualized rate of 2.4% in Q2 2023, nearly a full percentage point more than consensus estimates.
After a streak of 10 consecutive interest rate hikes over the period of 14 months by the United States Federal Reserve, the Fed kept the interest rate unchanged in its June meeting. On July 26, the Fed announced a further 25 bps interest rate hike which brings the funds rate to a target range of 5.25%-5.5%. This marks the benchmark rate at its highest level since 2001.
The comments of Fed Chairman Jerome Powell at a press conference generated mixed results for the equities markets. Even though policymakers indicated the possibility of two rate hikes by the end of the year, in their June meeting, Powell’s comments have raised hopes for just the one interest rate hike this year. The Fed Chairman affirmed that the central bank intends to make data-driven decisions concerning any further rate hikes on a “meeting-by-meeting” basis.
Jerome Powell said in his press conference on July 26:
“I would say it’s certainly possible that we will raise funds again at the September meeting if the data warranted. And I would also say it’s possible that we would choose to hold steady and we’re going to be making careful assessments, as I said, meeting by meeting.”
The S&P 500 index is highly concentrated this year, with the highest weightage of the five largest holdings since 1990. Companies involved in the AI landscape are playing an important role in uplifting the index. You can read more about the top constituents of the index and their weightages in our recently published article: Top 30 S&P 500 Stocks by Index Weight
Our list of 10 most oversold S&P 500 stocks right now includes leading companies across multiple sectors, including leading global food processing company Lamb Weston Holdings, Inc. (NYSE:LW), data analytics company Equifax Inc. (NYSE:EFX), aerospace and defense giant Raytheon Technologies Corporation (NYSE:RTX), and health care facilities operator HCA Healthcare, Inc. (NYSE:HCA), among others.
10 Most Oversold S&P 500 Stocks Right Now
Methodology
For this article, we compiled a list of 10 most oversold S&P 500 stocks right now with the lowest 14-day Relative Strength Index (RSI) as of July 28. The Relative Strength Index is a technical indicator that tracks momentum changes in stock prices. It was developed by J. Welles Wilder, and it is calculated by determining the mean of gains and losses of a stock in the last 14 days. An RSI above 70 implies that a stock is overbought and below 30 implies that it is oversold. These levels can be adjusted if needed. The stocks in this article are listed in descending order of their RSI.
Rollins, Inc. (NYSE:ROL), based in Atlanta, Georgia, is a global consumer and commercial services company providing essential pest control services and protection against termite damage, rodents, and insects to more than 2.8 million customers across the globe.
On July 26, Rollins, Inc. (NYSE:ROL) released its financial results for Q2 2023. Its revenues increased by 15% y-o-y to $821 million, while net income increased by 8% y-o-y to $110 million. At $0.23, the normalized EPS for the quarter missed consensus estimates by $0.01.
Rollins, Inc. (NYSE:ROL) has paid regular quarterly dividends for more than two decades. On July 25, its Board of Directors declared its latest regular quarterly cash dividend of $0.13 per share which represents a 30% increase from the dividend paid in the same quarter last year.
Earlier on April 5, Rollins, Inc. (NYSE:ROL) completed the acquisition of FPC Holdings, LLC, a leading Utah-based pest management company in a transaction valued at $350 million which includes $32 million of contingent payments based on future profitability.
Cambridge, Massachusetts-based Biogen Inc. (NASDAQ:BIIB) is a leading biotechnology company focused on the discovery and development of innovative therapies for serious neurological and neurodegenerative diseases. It also manufactures and commercializes biosimilars of advanced biologics.
The portfolio of Biogen Inc. (NASDAQ:BIIB) includes a broad range of medicines to treat multiple sclerosis, the first approved treatment for spinal muscular atrophy, and two co-developed treatments to address a defining pathology of Alzheimer’s disease.
On July 28, Biogen Inc. (NASDAQ:BIIB) announced that it had entered into a definitive agreement to acquire Reata Pharmaceuticals, Inc. (NASDAQ:RETA) in a cash transaction that values the company at $7.3 billion. Reata’s FDA-approved SKYCLARYS® is the first and only approved treatment for Friedreich’s ataxia in the United States.
As of March 31, Biogen Inc. (NASDAQ:BIIB) shares were owned by 67 hedge funds with a total value of $3.2 billion which makes it the most commonly held stock out of the 10 stocks that have made it onto our list of most oversold S&P 500 stocks right now.
Sunnyvale, California-based Juniper Networks, Inc. (NYSE:JNPR) designs, develops, and sells products and services for high-performance networks including routing, switching, Wi-Fi, network security, artificial intelligence ("AI") or AI-enabled enterprise networking operations ("AIOps"), and software-defined networking ("SDN") technologies.
Juniper Networks, Inc. (NYSE:JNPR) delivered strong results in Q2 2023 with revenue up nearly 13% on a year-on-year basis. It generated $1.4 billion in net revenue and $24.4 million in net income for the quarter. The company also announced a cash dividend of $0.22 per share.
As of Q1 2023, Juniper Networks, Inc. (NYSE:JNPR) shares were held by 33 hedge funds with a total value of $448 million. Ken Griffin’s Citadel Investment Group was its largest hedge fund shareholder with ownership of 2.7 million shares valued at $93 million.
Arlington, Virginia-based Raytheon Technologies Corporation (NYSE:RTX) is one of the world's largest aerospace and defense companies with a market capitalization of more than $129 billion and FY 2022 revenue of $67 billion.
On July 25, Raytheon Technologies Corporation (NYSE:RTX) released its financial results for Q2 2023. Its revenue increased by 12% y-o-y to $18.3 billion, while its net income increased by 2% y-o-y to $1.3 billion. The normalized EPS for the quarter was $1.29, which exceeds consensus estimates by $0.11.
Raytheon Technologies Corporation (NYSE:RTX) has paid regular cash dividends on its common stock since 1936. On June 5, the company’s Board of Directors declared a quarterly cash dividend of $0.59 per common share.
Omnicom Group Inc. (NYSE:OMC) is a leading global marketing and corporate communications company providing advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations, and other specialty communications services to over 5,000 clients in more than 70 countries.
On July 18, Omnicom Group Inc. (NYSE:OMC) released its financial results for Q2 2023. Its revenue increased by 1% y-o-y to $3.6 billion, while its net income increased by 5% y-o-y to $366 million. The EPS for the quarter was $1.82, which exceeds consensus estimates by $0.04.
On July 27, Omnicom Group Inc. (NYSE:OMC) announced the acquisition of Outpromo and Global Shopper, two of Brazil's leading connected commerce and retail media agencies, in a bid to create a foundation for an end-to-end e-commerce and retail media performance agency in the Brazilian market for the company.
Like other stocks such as HCA Healthcare, Inc. (NYSE:HCA), Juniper Networks, Inc. (NYSE:JNPR), and Lamb Weston Holdings, Inc. (NYSE:LW), Omnicom Group Inc. (NYSE:OMC) is among the most oversold S&P 500 stocks right now.
