雅虎香港財經 Contrarian Commandos: 3 Stocks Staging a Stealth Attack on Conventional Market Wisdom
Contrarian stocks describe a whole range of companies, whether by virtue of market position, operational outlook, or unique governance approach, buck wider market trends. Contrarian stocks tend to get a lot of flack from more conservative investors, as many see them as too risky or unhinged to be worth investing in long-term — but look how that turned out for Tesla (NASDAQ:TSLA) naysayers and short sellers over the past few years.
Of course, not all contrarian stocks end up winners — some are outright fraud, as in the case of Nikola(NASDAQ:NKLA) under Trevor Milton’s “leadership.” That’s why a degree of discernment is key, but practically speaking, that’s the case when evaluating all manner of stocks, contrarian or not.
Ultimately, contrarian stocks admittedly have greater volatility and more ups and downs than stabler stocks. Still, with a sufficiently long investment horizon and an ability to stomach some wild price swings, buying and holding contrarian stocks like those on this list could be your ticket to big gains over time.
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Markel Group (MKL)
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It may be hard to imagine, but once upon a time, investors considered Warren Buffett’s Berkshire Hathaway(NYSE:BRK-A, NYSE:BRK-B) part of the wider class of contrarian stocks. That’s a strange perspective to ustoday, considering the stock’s massive valuation and strength. But think about it — a former textile company-turned-conglomerate that includes energy, insurance, and other companies while also serving as an investment vehicle for the company CEO. Definitely a contrarian operational strategy!
If you missed the bus on Buffett, Markel Group (NYSE:MKL) is similarly positioned among contrarian stocks, though priced to buy at a (comparatively) cheap $1,600 per share. Thomas Gayner, the company’s CEO, manages the insurance firm similarly to how Warren Buffett operates Berkshire Hathaway—using the company as a large holding entity that channels “underwriting profits to invest in equity, including publicly traded stocks and ownership stakes in private companies.” This strategy, often called the “Baby Berkshire” model, has proven effective for Markel, delivering a 475% return over the past 20 years, surpassing the S&P 500’s gain of 370% during the same timeframe.
Despite the seemingly high price of shares, much of the industry’s bearish sentiment is focused on Markel’s traditional core insurance underwriting business, often overlooking Gayner’s innovative management approach. Considering Gayner’s track record and the strategy’s proven effectiveness, if one believes that this performance is sustainable, the contrarian stock shares are significantly undervalued, given the potential for long-term growth.
Nano Nuclear Energy (NNE)
Source: engel.ac / Shutterstock
Few operational models are as contrarian as Nano Nuclear Energy’s (NASDAQ:NNE): the company is developing small-scale, portable nuclear energy generators for widespread use, capturing the growing craze for the power source as a sustainable energy alternative.
The stock IPO’d on May 13th, so it’s fairly young but is already making waves. Shares soared over 100% by the end of May before stabilizing around $7.50 per share, almost doubling from its $4 IPO price. This impressive surge hints at considerable expectations for the company, especially given its pre-revenue status.
Nano Nuclear’s plans include shipping-crate-sized nuclear reactors designed to provide both steady power supply and rapid “surge” energy for areas with high demand. Potential applications for this technology are diverse, ranging from crypto mining and data center support to powering artificial intelligence operations.
Despite the excitement, Nano Nuclear anticipates that its products will only be market-ready by 2030, posing a significant wait for investors targeting contrarian stocks today. This long lead time raises concerns about the opportunity cost of such an investment. While last week’s trading activity reflects strong market interest, the current share price may seem high, given the extended timeline and associated risks. A more attractive entry point might be around the $6 mark, offering a better balance between potential rewards and risks.
AST SpaceMobile (ASTS)
Source: Andrey Suslov / Shutterstock.com
Can you even consider contrarian stocks without mentioning top performer AST SpaceMobile (NASDAQ:ASTS)? After enduring a tumultuous period marked by exciting strategic funding announcements followed by disappointing dilutive offerings and continuous hints at imminent commercial space-based cellular connections, investor patience wore thin. Many chose to cut their losses amidst the ongoing uncertainty and volatility—a decision they might regret.
In a dramatic turnaround, AST SpaceMobile’s shares soared 300% over the past month, spurred by two significant partnership agreements. I’ve previously discussed the apparent synergy between AST SpaceMobile and AT&T (NYSE:T), but late last month, they solidified their collaboration with a definitive agreement that commits AST SpaceMobile to serve AT&T’s customers from space until 2030. This development signals a shift toward commercial viability, a sentiment echoed by a subsequent announcement that Verizon (NYSE:VZ) had also entered a $100 million agreement with AST.
Currently, at around $9 per share, the excitement around AST SpaceMobile might be a bit overheated, given that it is still pre-revenue. The ideal entry point was around $4 for those looking at long-term potential. However, the stock will likely lose a little steam soon, offering contrarian stock investors an entry point in the $7 range.
On the date of publication, Jeremy Flint held a long position in MKL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.
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