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Investors are always on the lookout for untapped opportunities, especially in stocks that have been heavily discounted and now present promising opportunities for those prepared to wager on a recovery.

As the new year looms, a seasoned strategy, known as the Laggards trade, is witnessing a revival.

In its recent analysis, Goldman Sachs has shone a light on stocks that have trailed the broader market significantly on a year-to-date basis. Despite their underperformance, these Buy-rated securities hold considerable potential for robust gains in the upcoming year.

Laggards can often represent contrarian investment opportunities, as they may not have garnered bullish sentiment from investors yet, or the prevailing analyst consensus might be so low that even minor positive changes in fundamentals could result in significant performance gains.

The Laggard Phenomenon: The year 2023 has been a turbulent one for many stocks, with some sectors witnessing declines reminiscent of the tumultuous years of 2007 and 2020. However, history suggests a silver lining the laggards of one year often emerge as leaders in the first quarter of the next.

Goldman Sachs equity strategists, Deep Mehta and Tarun Lalwani, CFA, explained that despite a 37% YTD underperformance relative to the S&P 500 index, 2023s laggards could be next years leaders, as the market rally in November suggests signs of an early reversal.

Sector Shift: This years laggards differ from those of 2022, with Healthcare, Financials, and Industrials taking the lead. These stocks align with several key investment themes: low financial returns, lower quality scores, affordable valuations, and high growth prospects.Goldman Sachs Unveils 5 Clusters Of Stocks In The Laggards Trade

1) Laggards with Differentiated Bullish Views: These are Buy-rated stocks by Goldman Sachs analysts, who hold a contrarian opinion compared to less than half of Wall Street analysts. They have at least a 10% upside potential. Some of the stocks included in this group are as follows: Moderna Inc. MRNA : Upside to target 189%, YTD underperformance vs. S&P 500 -75% Pfizer Inc. PFE : Upside to target 66%, YTD underperformance vs. S&P 500 -63% Enphase Energy Inc. ENPH : Upside to target 48%, YTD underperformance vs. S&P 500 -79% Loading… Loading…

2) Laggards with Consensus-Defying Estimates: These stocks have Goldman Sachs estimates that significantly diverge from the consensus, suggesting a potential surprise factor. Highlighted below are some key stocks within this group: Darling Ingredients Inc. DAR : Upside to target 86%, YTD underperformance vs. S&P 500 -47% Shoals Technologies Group SHLS : Upside to target 89%, YTD underperformance vs. S&P 500 -60% ANGI Homeservices Inc. ANGI : Upside to target 84%, YTD underperformance vs. S&P 500 -16%

Read also: Will Novembers Turkey Rally Set Stage For Decembers Santa Claus Rally For Stocks?

3) Growth at Reasonable Valuations: These are Buy-rated laggards projected to have double-digit topline growth in 2024 and 2025, with a Price-Earnings-Growth ratio below 1.0. Included in this group are the following notable stocks: Array Technologies Inc. ARRY : Upside to target 89%, YTD underperformance vs. S&P 500 -60% First Solar Inc. FSLR : Upside to target 72%, YTD underperformance vs. S&P 500 -13%

4) Laggards with Rebounding Margins: These stocks are expected to show positive sales growth and improving operating margins in 2024 compared to 2023. The following represents a selection of stocks categorized in this group: Bath & Body Works Inc. BBWI : Upside to target 45%, YTD underperformance vs. S&P 500 -39% Sensata Technologies Holding ST : Upside to target 45%, YTD underperformance vs. S&P 500 -37%

5) Laggards with Superior CROCI: These are stocks with a consistent Cash Return on Capital Invested (CROCI) greater than the Weighted Average Cost of Capital (WACC), indicating efficient capital use and profitability. Key stocks within this group are listed below: Aptiv PLC APTV : Upside to target 52%, YTD underperformance vs. S&P 500 -29% Bristol-Myers Squibb Co. BMY : Upside to target 38%, YTD underperformance vs. S&P 500 -50%

Read now: Golds Record High: Why Havent Gold Miners Followed Suit?

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Oilers forward Hyman injured in 1st, exits Game 4

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Oilers forward Hyman injured in 1st, exits Game 4

EDMONTON, Alberta — Edmonton Oilers‘ top-line forward Zach Hyman was ruled out for the rest of Game 4 of the Western Conference finals Tuesday against the Dallas Stars after taking a hit from forward Mason Marchment, ESPN’s Emily Kaplan reported on the game broadcast.

The first-period collision appeared to immediately rattle Hyman, who dropped his stick and seemed to favor his right arm or wrist. Hyman went directly to the Oilers’ dressing room and did not return.

Hyman has been a key member of the Oilers’ postseason success, registering a league-leading 119 hits in 14 playoff games and scoring five goals and 11 points. He’s a fixture on the team’s top forward unit with Connor McDavid and is part of both the Oilers’ power play and penalty kill.

Edmonton was already down a forward going into Game 4 with Connor Brown sidelined after a hit from Dallas defenseman Alexander Petrovic in Sunday’s Game 3. Viktor Arvidsson returned to the lineup as Brown’s replacement on the fourth line.

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Referee Rooney returns, 11 days after high stick

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Referee Rooney returns, 11 days after high stick

EDMONTON, Alberta — NHL official Chris Rooney was back on the ice Tuesday night for Game 4 of the Western Conference finals between the Edmonton Oilers and Dallas Stars.

It was the veteran referee’s conference finals debut, and a fitting return for Rooney given the circumstances. It was Rooney’s first game since he took a high stick to the face on May 17 during Game 7 of the Eastern Conference second-round series between the Toronto Maple Leafs and Florida Panthers.

Rooney was injured 13 seconds into the second period when Panthers’ defenseman Niko Mikkola caught him with the end of his stick while fighting for a puck. Rooney fell to the ice and was tended to by trainers from both teams.

While bloodied, he was able to leave under his own power. Rooney sustained a black eye and received stitches for his injury but had no lasting damage. He was replaced at the time by Garrett Rank, in the building on standby in case on injury.

It was clear even the day after his injury that Rooney, 50, hoped to resume duties at some point in the playoffs. The Boston native was finally able to step in for Game 4 with fellow referee Dan O’Rourke.

The pair was joined by linesmen Ryan Gibbons and Matt MacPherson. Referee Graham Skilliter and linesman Ryan Daisy were in the building as alternates.

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Hintz (leg) back in action, joins Stars’ top line

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Hintz (leg) back in action, joins Stars' top line

EDMONTON, Alberta — Dallas Stars forward Roope Hintz is back in the lineup for Game 4 of the Western Conference finals Tuesday.

The club’s top skater, sidelined since Game 2, when he took a slash to the left leg from Edmonton Oilers defenseman Darnell Nurse, was placed on the top line, alongside Jason Robertson and Mikko Rantanen after taking warmups and line rushes prior to puck drop.

Hintz also took part in warmups before Game 3 on Sunday but exited early and was ruled out. He was back on the ice for Dallas’ optional practice Monday and told reporters he was “feeling good” and “trying to do everything I can” to get back in for Game 4.

It was early in the third period of Game 2 when Hintz — parked in front of the Oilers’ net — shoved Nurse from behind, and the Oilers’ blueliner responded by swinging his stick at Hintz’s leg. Hintz went down to the ice for several minutes before being helped off by Lian Bichsel and Mikael Granlund.

Nurse received a two-minute penalty for the slash but no supplementary discipline from the league. The blueliner addressed the incident publicly for the first time Tuesday, saying it didn’t come with malicious intent.

“I was backing up to net and I got shot in the back. And I think it was just a natural reaction [to respond],” Nurse said. “It’s probably a play that everyone in this room, whether you’re a net-front guy or D man, probably happens a dozen, two dozen times in a year. It’s unfortunate that I must have got [Hintz] in a bad spot. You don’t want to go out there and hurt anyone. But it was just one of those plays that happens so often.”

Having Hintz unavailable hurt the Stars in Game 3, a 6-1 drubbing by the Oilers that put Dallas in a 2-1 hole in the best-of-seven series. Hintz is the Stars’ second-leading scorer in the postseason, with 11 goals and 15 points through 15 games. He was hopeful when taking warmups Sunday that he’d feel good enough to get back in, but a quick discussion with the training staff made it clear he wasn’t ready.

Before Tuesday night, coach Peter DeBoer had since classified Hintz’s status as day-to-day.

“Of course you want to go every night, but sometimes you just can’t,” Hintz said. “I don’t know how close I [was to playing]. But I have played many years [and I] know when it’s good and when it’s not. I should be good to know that [when] it comes to that decision.”

The Oilers will have some lineup changes of their own to sort through in Game 4. Connor Brown, who is out after taking a hit from Alexander Petrovic in Game 3, will be replaced by Viktor Arvidsson. Calvin Pickard, injured in Edmonton’s second-round series against Vegas, will return to back up Stuart Skinner. And Edmonton continues to wait on defenseman Mattias Ekholm, who is getting closer to returning from a lower-body injury.

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