2 Stocks Down 63% and 72% to Buy Right Now


With less than a month remaining in this year, it’s fair to say that 2024 has been great for the stock market. The S&P 500 index, which is often treated as the benchmark for broader market performance, has risen roughly 28% year to date. Meanwhile, the more growth-focused Nasdaq Composite index has seen its level rise 31.5% over the period.

Nvidia, Palantir, Microsoft, and other big winners may continue to march higher and help set records for major indexes, but investors may also want to consider stocks that still trade down big from previous valuation highs. With that in mind, read on to see why two Motley Fool contributors think that buying these stocks right now would be a smart year-end move.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Jennifer Saibil: Shares of Carnival (NYSE: CCL) are up 44% this year after more than doubling last year. So investors might be surprised to learn that this top stock, which seems to have rebounded, is still 63% off its all-time highs.

The business itself is doing great, with sales completed back and growing, and demand at unprecedented levels. In the 2024 fiscal third quarter (ended Aug. 31), revenue increased from $6.9 billion to $7.9 billion year over year. Nearly half of 2025 inventory was already booked as of the end of September, and it’s also in its best-ever booked position for 2026.

Profitability still isn’t where it used to be, which was reliable and growing. Today, it’s still returning. But as demand stays strong, the profitability metrics are healthy. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 25% over last year to $2.8 billion in the third quarter, and operating income improved by $554 million from last year to $2.2 billion. Net income was positive in the quarter at $1.7 billion, although Carnival hasn’t returned to consistently positive net income — yet.

So what’s the problem? The main issue for investors is Carnival’s massive debt, which it took on when cruises weren’t running. Although management is paying it off steadily, it’s still highly elevated at $29 billion as of the end of the third quarter. Carnival stock soared on the news of interest rates being cut, because that will help it pay off the debt faster.

Another worry is that demand will eventually slow down, and Carnival’s performance could look choppy before it stabilizes to normal levels. But investors should focus on the long term.



Source link

About The Author

Scroll to Top