10 Beaten-Down Stocks With Upside Potential

Office Depot, Advanced Micro Devices and J.C. Penney rank among the biggest decliners of the past five trading days.
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BOSTON (TheStreet) -- Stocks have sunk this week, torpedoed by weaker unemployment and a wider trade gap. Here are the 10 stocks that fell the most. For investors expecting a rebound, they may offer more upside since they were punished most in the downturn. For those who see an extended decline, the shares are potential short-sale candidates.

10.

International Paper

(IP) - Get Report

sells paper, packaging and specialty panels. Its stock has dropped 11% in the past five days. Second-quarter profit decreased 32%, to $93 million, or 21 cents a share, as revenue gained 5.5%. The operating margin widened to 7% from 6%. International Paper's stock has risen 13% in the past year. It trades at a forward earnings multiple of 8.4 and a cash flow multiple of 2.9 -- 64% and 53% discounts to industry averages. Of analysts covering the stock, 12, or 75%, rate it "buy." A median target of $34.42 implies 58% of upside.

9.

Zions Bancorporation

(ZION) - Get Report

is a multibank holding company. Its stock has fallen 11% in the past five days. The second-quarter loss widened to $113 million, or 84 cents a share, from $51 million, or 21 cents a share, a year earlier. The operating margin climbed to shallow negative territory. Zions shares have gained 25% in the past year. They sell for a forward earnings multiple of 35, a 142% premium to the peer average. They're cheap based on cash flow. Of analysts following Zions, 22% rank its stock "buy." A median target of $25.82 suggests a 28% return.

8.

The New York Times Co.

(NYT) - Get Report

owns The New York Times and Boston Globe newspapers and related media assets. Second-quarter profit dropped 18%, to $32 million, or 21 cents a share, as revenue inched up 1.2%. The operating margin rose to 10% from 6.7%. The company's stock trades at a forward earnings multiple of 11, a book value multiple of 1.8 and a cash flow multiple of 4.4 -- 58%, 47% and 70% discounts to industry averages. Roughly 33% of analysts covering the shares rank them "buy." A median target of $11 implies 39% of upside.

7.

Nabors Industries

(NBR) - Get Report

is a land-drilling contractor for oil and natural gas. It swung to a second-quarter profit of $44 million, or 15 cents a share, from a loss of $193 million, or 68 cents a share, a year earlier. Revenue rose 4.3%. The operating margin widened to 13% from 9.4%. Nabors shares sell for a forward earnings multiple of 11, a book value multiple of 0.9 and a cash flow multiple of 4.4 -- 45%, 63% and 63% discounts to peer averages. Of brokerage firms evaluating Nabors, 16, or 52%, rate its stock "buy." A median target of $24.82 suggests a 34% return.

6.

Monster Worldwide

(MWW)

provides online employment services, connecting employers and job seekers. Monster's second-quarter loss widened to $3 million, or 2 cents a share, from $1.4 million, or 1 cent a share, a year earlier. Revenue declined 3.7%. Monster's stock trades at a forward earnings multiple of 41 and a cash flow multiple of 17 -- 56% and 9% premiums to Internet software and services industry averages. Roughly 40% of researchers following Monster advise buying its shares. A median target of $17.60 implies 49% of potential upside.

5.

DeVry

(DV)

is a for-profit educator with classroom and online course offerings. The company announced its fiscal fourth-quarter performance yesterday. Net income increased 93%, to $72 million, or 94 cents a share. Revenue grew 23% and enrollments gained 22%, an encouraging tell of future performance. DeVry shares sell for a forward earnings multiple of 10 and a book value multiple of 2.9 -- 31% and 44% discounts to industry averages. Of analysts covering the stock, 13, or 59%, advocate buying it. A median target of $76.25 suggests a 67% return.

4.

The Washington Post Co.

(WPO)

owns The Washington Post, Newsweek magazine -- its sale is expected to close this month -- and Kaplan, an education company. Second-quarter profit multiplied to $92 million, or $10.25 a share, from $12 million, or $1.30 a share, a year earlier. Revenue grew 6.5%. The stock trades at a trailing earnings multiple of 14 and a forward earnings multiple of 13 -- 33% and 52% discounts to peer averages. Just one sell-side firm,

EVA Dimensions

, covers the company, ranking its stock "buy."

TheStreet's

stock model rates it "hold."

3.

J.C. Penney

(JCP) - Get Report

owns a network of department stores in the U.S. Its stock has fallen 13% in the past five trading sessions. Second-quarter profit more than doubled to $60 million, or 25 cents a share, as revenue inched up 1.2%. The operating margin widened to 3.8% from 2.6%. J.C. Penney shares have tumbled 37% in the past year. They sell for a forward earnings multiple of 11, a book value multiple of 1 and a cash flow multiple of 3.5 -- 27%, 59% and 80% discounts to peer averages. Roughly 38% of analysts following J.C. Penney rate its stock "buy."

2.

Advanced Micro Devices

(AMD) - Get Report

makes chips for computing and graphics markets. Its stock has tumbled 14% in the past five days. The second-quarter loss narrowed to $43 million, or 6 cents a share, from a loss of $310 million, or 49 cents, a year earlier. Revenue rose 40%. Advanced Micro's stock has soared 83% in the past year. It trades at a forward earnings multiple of 9.7 and a cash flow multiple of 4.7 -- 19% and 65% discounts to peer averages. Of researchers covering the stock, 24% rank it "buy." A median target of $9.61 implies 46% of upside.

1.

Office Depot

(ODP) - Get Report

sells office supplies. Its stock has dropped 15% in the past five trading sessions. The second-quarter loss narrowed to $9.5 million, or 7 cents a share, from $82 million, or 31 cents, a year earlier. Revenue declined 4.4%. Office Depot's shares have fallen 19% in the past 12 months. They sell for a forward earnings multiple of 27, a 95% premium to the industry average, but are cheap based on book value and cash flow. Roughly 17% of analysts rating the company advise buying. A median target of $6.33 suggests a 49% return in the months ahead.

-- Reported by Jake Lynch in Boston.

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