Insider Monkey

14 Best Depressed Stocks To Buy Now

Fahad Saleem
12 min read

In This Article:

In this article, we will take a look at the 14 best depressed stocks to buy now. To see more such companies, go directly to 5 Best Depressed Stocks To Buy Now.

Legendary value investor Howard Marks started writing memos to investors decades ago. These memos are still very famous and the co-founder of Oaktree Capital stills writes memos to investors that are read widely among investor circles worldwide. In a latest memo, Marks recalls how many years ago when he started writing memos to investors he had written a sentence that went on to become a motto of Oaktree since the sentence proved its mettle and truth over the years:

If we avoid the losers, the winners will take care of themselves.

One of the fundamental truths in investing has been to avoid losers and control risks. You just cannot bet all your money on stocks that are highly risky. But in his September memo Marks talks at length to clarify a confusion: there’s a difference between risk avoidance and risk control. If you want to avoid risk, just do nothing and no harm will be done to you. But that comes at a cost, obviously. You won’t see any gains either. In the investing world, those who want to avoid risks should put their money in government-guaranteed Treasury bills and sleep peacefully. But the downside is that these bills post the lowest returns available. On the other hand, risk control mean living with the reality of the world where risk is a constant in almost every domain.  What makes a smart investor stand out is their ability to take calculated risks. Marks said:

“Risks like this needn’t be avoided. If you have real insight, such risks can be borne prudently and profitably. I know several investors who take much more risk than Oaktree does and whose bad years are much worse than ours. But the few who possess genuine skill – what I call “alpha” (more on that later) – produce jumbo returns in their good years, such that their long-term returns are exceptional. Their clients are well rewarded . . . assuming they have enough intestinal fortitude to hang in through the bad years. Thus, risk-taking isn’t unwise per se, and risk avoidance is appropriate only for investors who feel they can’t survive tough times.”

Best Depressed Stocks to Buy in 2023
Best Depressed Stocks to Buy in 2023

Howard Marks of Oaktree Capital Management

Our Methodology

For this article first used a stock screener to list down all the stocks that recently fell to 52-week lows or are currently trading very close to their 52-week low values. From this long list of stocks we selected 14 stocks with the highest number of hedge fund investors. Therefore, these stocks are the best depressed stocks to buy according to smart money investors.

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