The past year has been very tough for many companies, and even the TSX was looking like it wouldn’t produce positive returns until the index started to gain some momentum in September. However, many stocks haven’t been so lucky, and some industries have been hit a lot harder than others.
I’m going to look at four stocks that have been some of the worst performing in 2017 and determine which of these companies could be poised for a recovery in 2018.
Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) has declined 45% this year. The share price hit a new all-time low after the company saw a lot of controversy earlier in the year. As oil prices went up, the stock did have a recovery in price a few months ago, but it has since given back those gains.
Cenovus could have a lot of upside in 2018, and although the company posted a loss in its last quarter, it has been able to stay in the black for the three previous periods. It also saw sales rise nearly 50% in Q3, and that is a trend that we could see continue as the industry recovers.
Investors were a little alarmed when earlier this month the new CEO announced more aggressive cuts to the company’s expenses, which may have raised concerns that the worst may not be over. However, it could just be a new CEO trying to put his stamp on the company and trying to display a different style of leadership, while also distancing himself from the old boss.
Cenovus is one stock I would expect to have a very strong year in 2018, especially if oil prices can continue to climb.
Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) has also dropped 45% in value this year, and it too could benefit as oil prices continue to rise. The company had a strong Q3 that saw sales grow more than 30%, production increase, and Baytex also achieved some savings in its operating expenses.
There are a lot of positives for Baytex’s stock and that could set up 2018 to be a very strong year for the company.
Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) is down more than 53% this year, and it has followed a similar path to Baytex and Cenovus. The company had a disappointing quarter recently that was driven down by asset impairments, but there were many positives for investors to take away from the results.
If Crescent Point can come back with a strong quarter in Q4, then it too might be on a path to recovery in 2018.
Tahoe Resources Inc. (TSX:THO)(NYSE:TAHO) has also declined 53% this year, but for very different reasons. Earlier this year, Tahoe lost its mining licence at its Escobal mine in Guatemala, which has been a social and political battleground for much of the year.
Although the company eventually got the licence back, investors have been hesitant to place their money with Tahoe ever since.
The stock may see a recovery in 2018, but the company will need to do a lot better than it did in Q3 to convince investors it is a good buy.
