Bargain Stocks Primed for Second-Half Surge
Contrarian picks offer potential gains despite market headwinds.
Despite a bumpy ride, the S&P 500 has gained 5.5% by mid-2025, recently hitting a record high. However, some stocks have lagged, presenting opportunities for savvy investors seeking turnaround potential. Let’s explore three such contrarian buys.
UnitedHealth: A Healthcare Giant Poised for Rebound
Shares of UnitedHealth (UNH) plummeted 38% by June’s end, an uncharacteristic drop for a company of its size. While healthcare reform, spending cuts, and rising medical costs present risks, the sell-off may be overdone.
Currently, UnitedHealth’s shares trade at a P/E multiple of just 13, significantly lower than the S&P 500 average of 24. Despite withdrawing its guidance for the year, the appointment of **Stephen Hemsley** as CEO, taking over from **Andrew Witty**, signals a renewed focus on achieving long-term growth targets.
Positive earnings surprises could lift this healthcare stock, as investors seek signs of recovery. According to a recent report, healthcare spending in the U.S. is projected to grow by 7.5% in 2025, indicating potential tailwinds for the industry (CMS.gov).
Marvell Technology: Riding the AI Wave
Custom chipmaker Marvell Technology (MRVL) experienced a 30% decline in the first half of the year. Despite strong revenue growth, with $1.9 billion reported in its most recent quarter, weaker-than-expected guidance disappointed investors.
Marvell’s custom chips cater to the needs of tech giants investing heavily in artificial intelligence. With AI spending showing no signs of slowing, Marvell’s forward P/E multiple of 27 makes it an attractively priced AI stock.
Deckers Outdoor: A Footwear Favorite Ready to Run
Deckers Outdoor (DECK), maker of UGG boots and Hoka shoes, faced a significant setback, with shares down 49% through June. Factors like exposure to China, tariff risks, and a potential slowdown in discretionary spending contributed to the decline.
However, this sell-off may be excessive for a company still performing well. Recent results showed quarterly sales exceeding $1 billion, up 6% year-over-year, with net income rising 19% to $151 million.
Trading at just 17 times its trailing earnings, Deckers presents an appealing valuation for a growing business. Given the negativity already factored into the stock price, Deckers could outperform the S&P 500 in the second half and beyond.
