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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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The Gators, a top QB and a $13.85 million NIL deal gone wrong: What to know and what’s next

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The Gators, a top QB and a .85 million NIL deal gone wrong: What to know and what's next

Jaden Rashada, a former ESPN 300 quarterback recruit, sued the University of Florida and coach Billy Napier on Tuesday. Rashada is claiming he was defrauded of millions of dollars in name, image and likeness money.

The lawsuit, among other things, alleges that Napier promised the player’s father a $1 million “partial payment” upon signing. Rashada never got the money, and the boosters never fulfilled the deal, the lawsuit states.

It is the latest in a long saga involving the player and the school. Now, Rashada is the first college athlete known to sue his coach or a booster due to a dispute over an NIL deal.

What’s next for Rashada and Florida? Our reporters break it down.

How did we get here?

Rashada was ranked No. 31 overall in the 2023 class and had a prep career that featured several transfers. His freshman season in high school was played at Liberty High School (Brentwood, California). He then transferred to IMG Academy in Florida before going back to California to play three seasons at Pittsburg (California) High School. His college decision came down to two Florida schools and two big NIL numbers.

Rashada committed to the Miami Hurricanes in June 2022. The lawsuit states that Rashada had a $9.5 million NIL promise with the Canes. But Rashada decommitted that November and promptly flipped to the Florida Gators and Coach Napier. He signed his national letter of intent during the December signing period. However, he didn’t enroll at Florida, and his arrival in Gainesville was contingent on a four-year, $13.85 million NIL deal. Rashada asked for a release from his letter of intent when the deal fell through.

The Gator Collective, an independent fundraising organization that distributed money to UF athletes at the time, was responsible for the deal. However, the financial backing did not materialize, and the Gator Collective terminated the contract. Rashada was released from his letter of intent. He then took a visit to Arizona State and committed to play for the Sun Devils, arriving on campus in July 2023.

Rashada started the first two games of the season for Arizona State, but an injury kept him out for most of the season. In three games, he was 44-of-82 for 485 yards, with four touchdowns and three interceptions.

Rashada entered the transfer portal on April 18 and is now transferring to Georgia, where he will have four years of eligibility remaining. — Tom VanHaaren


What’s next for Rashada?

Georgia emerged as Rashada’s likely transfer destination soon after he entered the portal. He selected the Bulldogs on April 25, captioning his Instagram announcement, “Compete with the BEST.” Rather than vying for the starting job at ASU with emerging Michigan State transfer Sam Leavitt, Rashada enters a situation where he will play behind Georgia’s Carson Beck, a top Heisman Trophy contender and NFL hopeful.

Barring an injury to Beck, Rashada will use the 2024 season for developmental purposes, while absorbing a different offense under coordinator Mike Bobo in Athens.

A realistic goal would be to start in 2025 for a Bulldogs team always in the national title hunt. He would need to beat out primary challenger Gunner Stockton, who enters his third season in the Georgia program and gained valuable experience this spring. Both Stockton and incoming freshman Ryan Puglisi ranked among ESPN’s top 110 recruits in their respective classes. Coach Kirby Smart likes to have four scholarship quarterbacks on his roster at all times, and the team has a 2025 commitment from ESPN 300 recruit Ryan Montgomery.

Rashada is the most decorated quarterback prospect of the bunch, but he will need to adjust quickly, especially with Stockton ahead on the learning curve. — Adam Rittenberg


How did this affect Florida on the field?

The Gators signed Rashada in December 2022, anticipating he would compete for the starting job with veteran Graham Mertz, who transferred in from Wisconsin. Without him, the job went to Mertz, who threw for 2,903 yards, completed 73% of his passes and threw 20 touchdown passes to three interceptions last season. Losing Rashada did not help Napier from a public relations standpoint, as he drew ire from the Florida fan base — especially after a 5-7 finish to 2023.

Florida did have a plan for its future, though, as Napier had a longstanding commitment from D.J. Lagway, the top-rated quarterback in the class of 2024. Lagway committed to Florida just weeks before Rashada signed his letter of intent, and the Gators were in a massive fight to keep Lagway as other schools went after him as signing day approached last December. Lagway has said Clemson, USC and Texas A&M all made late pushes, but he ultimately signed with the Gators and enrolled early, going through spring football.

His decision to come to Florida was absolutely huge for Napier, who has yet to find solid footing headed into Year 3 and desperately needed Lagway to sign. Mertz is back for one more season and is the presumptive starter. But there is a lot riding on this season for Florida and for Napier in particular. With the season opener against rival Miami, Florida fans want to see progress and results immediately. If Mertz struggles, do not be surprised if fans start calling for Lagway. — Andrea Adelson


Could the Gators face any NCAA repercussions from Rashada’s claims?

The NCAA alerted Florida almost a year ago that it was investigating claims that the football program had violated recruiting rules, according to documents obtained by The Associated Press. ESPN’s Mark Schlabach confirmed the investigation was related to Rashada’s recruitment.

Rashada claims in his lawsuit that Napier directly promised Rashada a $1 million payment from a booster if he signed with Florida, which would be a violation of the NCAA’s policies. The NCAA penalized Florida State and suspended one of its coaches in January for getting involved in NIL offers made to a prospect.

However, the NCAA sent a letter to its schools in late February explaining that it was pausing all open enforcement cases “involving third-party participation in NIL-related activities” after a federal judge in Tennessee granted an injunction that prohibited the NCAA from enforcing some of its rules. That case was filed by Tennessee’s attorney general after the NCAA opened an investigation into the Vols’ recruiting tactics.

Any other high-profile enforcement actions taken by the NCAA — such as a penalty for Napier or the Gators — could invite additional lawsuits at a time when the association remains vulnerable to antitrust scrutiny, which makes it unlikely that any NCAA punishments could be coming soon. — Dan Murphy

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Yankees ace Cole faces hitters, eyes June return

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Yankees ace Cole faces hitters, eyes June return

NEW YORK — New York Yankees ace Gerrit Cole says he thinks he could return to a major league mound in June after facing hitters for the first time since spring training.

The reigning AL Cy Young Award winner, wearing a full pinstriped uniform, threw 20 pitches to Oswaldo Cabrera and Jamai Jones before Tuesday night’s game against Seattle.

Cole had thrown five bullpen sessions before the batting practice. The 33-year-old right-hander, sidelined by elbow nerve inflammation and edema, said he will have one or two more BP sessions before starting a minor league rehabilitation assignment.

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Cubs activate Swanson ahead of Braves series

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Cubs activate Swanson ahead of Braves series

CHICAGO — The Chicago Cubs on Tuesday activated shortstop Dansby Swanson from the 10-day injured list and recalled infielder Luis Vázquez from Triple-A Iowa.

Swanson, 30, was placed on the injured list May 8 because of a right knee sprain. He’s batting .209 with three doubles, one triple and four home runs in 37 games.

Vázquez, 24, earned his first major league call-up after batting .262 with 10 doubles and three homers in 39 games with Iowa.

The Cubs opened a home series against Swanson’s former team, Atlanta, on Tuesday night. He was in the lineup, batting eighth and playing shortstop. In the corresponding roster moves, the Cubs optioned Pete Crow-Armstrong and infielder Miles Mastrobuoni to Iowa.

Information from The Associated Press was used in this report.

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