This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Downgraded Stocks That Should Be Buys

MINNEAPOLIS ( Stockpickr) -- Many books could be written discussing the virtues -- or lack thereof -- of Wall Street research. What probably began as an innocent extension of the brokerage business has since become something loathed by many yet still relied upon by the majority of market participants. Like it or not, analysis from the supposed best and brightest financial minds is here to stay.

Individual investors first began questioning Wall Street research during the dot-com boom. The media helped put a spotlight on research during those heady times, when stocks would soar on demand-fueled hope. Often long after the gains, a Wall Street analyst would put a buy recommendation on the stock. On the downside, a stock like Enron or Worldcom would collapse, and only after substantial losses would Wall Street come forward with a sell recommendation.

Related: 5 Trades to Profit From the Selloff

Many investors believe that the much of what passes for research lacks individual thought and usually comes a day late and a dollar short.

To be fair, there are plenty of analysts adding value to the investor equation, but it has been my experience that most of what comes out of Wall Street is worthless. In fact given the institutionalization of research, there is an opportunity to take advantage of the system as it stands.

On a weekly basis, I use analyst estimates of earnings to identify trading opportunities. Today, I want to use Wall Street downgrades to help identify investing opportunities. Although the industry has gotten much better with respect to downgrades before a stock sells off, there are plenty of examples where they are still far too late to the game to save anyone any money.

With that in mind, here are five recently downgraded stocks to buy today.

1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
CREE $35.03 0.00%
MCP $0.32 0.00%
TM $142.40 0.00%
TSL $12.11 0.00%
VAR $93.74 0.00%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs