3 Contrarian Bull Calls for Asymmetric Gains

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Wall Street analysts could be highly influential relating to investors considering stocks to purchase. These analysts’ rankings can move prices within the short term while fundamentals play more into an organization’s price over the long run. Out of all the stocks to think about, nonetheless, investors should want to take a look at contrarian bull call stocks.

When a given stock falls and you are taking a bullish position, that’s called a contrarian move. Following an analyst’s contrarian bull call after a stock has lost a significant slice of its value, investors can enjoy asymmetric gains by betting against the market.

The businesses on this list represent the cryptocurrency sector, a cybersecurity firm and an electrical vehicle (EV) maker, respectively. Right away, they’re all enticing contrarian buys.

Coinbase (COIN)

COIN stock Coinbase logo on screen with Bitcoin coins

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In line with Finviz, Coinbase (NASDAQ:COIN) faces a heavily bearish short float of 23.82%. COIN stock currently has a consensus “hold” rating as well. Nonetheless, the corporate has cut costs, closed its Japan unit and settled some regulatory uncertainties. By the top of 2023, I consider Coinbase can prove its less convinced analysts fallacious.

Without much warning, Bitcoin (BTC-USD) has began to stage a rally in 2023. Trading for around $16,500 on Dec. 31, the crypto now trades for around $23,000. This movement is rekindling interest in crypto-related names like COIN stock.

Late last yr, FTX’s bankruptcy shocked the crypto industry. In consequence, investors sold their shares of crypto platforms and miners as account holders withdrew funds.

To lower costs, Coinbase cut about 20% of its staff on Jan. 10, or 950 people. The corporate also reaffirmed its adjusted EBITDA lack of $500 million for 2022. Coinbase expects to fulfill its 2022 subscription and repair revenue outlook and its average transaction revenue per user goal for the yr as well.

COIN is a stock to purchase as the corporate manages near-term uncertainties. By cutting costs while meeting key targets, investors may bet on operating profits expanding from here. Overall, Coinbase is an indirect bet that cryptos will hold their value.

CrowdStrike (CRWD)

A sign with the Crowdstrike (CRWD) company logo

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Next up on this list of contrarian bull call stocks is CrowdStrike (NASDAQ:CRWD). Per TipRanks, CRWD stock has a consensus “strong buy” rating and a median consensus price goal of roughly $163 as of this writing. That represents upside of greater than 50%.

Markets are frightened that this cybersecurity firm’s customers may delay the closing of software contracts as they cut costs. As an alternative of waiting for the quarterly report, nonetheless, investors should consider the corporate’s technological edge.

CEO George Kurtz says Microsoft’s (NASDAQ:MSFT) Defender is just not a threat to Crowdstrike’s product and business. Defender is the rival company’s legacy-based, signature-based antivirus product. As Kurtz notes:

“Customers are searching for technologies that work and stop breaches. And the truth is, we’ve plenty of customers that come to us which have been ransomed using Microsoft technologies and so they’re buying a next-gen product like CrowdStrike.”

Crowdstrike could post strong growth on the small and medium business side looking forward. Its customers need cybersecurity protection in any respect times.

Rivian Automotive (RIVN)

Rivian (RIVN) car manufacturing plant. Rivian develops vehicles, products and services related to sustainable transportation.

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Shares of Rivian Automotive (NASDAQ:RIVN) maintain a “moderate buy” rating on TipRanks. The contrarian nature of this pick centers around markets selling its shares. RIVN stock has lost roughly half of its value since October 2022, falling from the $30 area to about $18 today.

Investor fears rose when rival Tesla (NASDAQ:TSLA) slashed the costs of its EVs by as much as $13,000. That move has put pressure on Rivian’s margins, although potential customers may now perceive less glamor value in Tesla.

Many key executives have left Rivian in recent months as well. They include an organization leader in engineering and a head of the supply-chain unit. Nonetheless, this may very well be a part of a positive evolution for Rivian. The firm has already accomplished development of its EV truck. From here, the corporate needs marketing staff to advertise its EVs and speed up sales.

Within the third quarter, Rivian lost $1.88 per share on revenue of $536 million. The corporate also expected to supply 25,000 units in 2022 but fell just short. Still, CFO Claire McDonough says Rivian is guiding for lower capital expenditures in the brand new yr. Looking forward, 2023 is poised to be a transition yr for the corporate.

On the date of publication, Chris Lau didn’t hold (either directly or not directly) any positions within the securities mentioned in this text. The opinions expressed in this text are those of the author, subject to the InvestorPlace.com Publishing Guidelines.

Chris Lau is a contributing writer for InvestorPlace.com and diverse other financial sites. Chris has over 20 years of investing experience within the stock market and runs the Do-It-Yourself Value Investing Marketplace on Searching for Alpha. He shares his stock picks so readers get actionable insight to attain strong investment returns.

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