A lot of top companies had one big thing in common last year: terrible stock performance. Many industry leaders saw their stock prices sink by double digits. In some cases, investors fled a particular stock because of its sensitivity to the economy. That was the case for Nike (NKE 0.19%).
In other cases, the companies struggled for company-specific reasons -- and investors didn't want to stick around for more losses. That was the story at Walt Disney (DIS -0.04%) and Teladoc Health (TDOC -2.40%).
Investors gave Nike, Disney, and Teladoc the thumbs down in 2022. But 2023 could be different for these down-on-their luck companies. They may even win a thumbs up from investors this time around. Why? Let's find out.
1. Nike
Nike suffered last year as supply chain troubles and coronavirus disruptions left it with too much inventory. But the company offered investors good news in its recent earnings report. The worst of the inventory problem is over, and Nike has made great progress in bringing levels down.
And as Nike said, the inventory issue and other problems like unfavorable currency exchange rates are temporary. What isn't temporary is Nike's brand strength.
That's helped the company report growth even during these difficult times. In the quarter, Nike's total revenue, Nike direct sales, and Nike brand digital sales each climbed in the double digits.
If we exclude currency exchanges, Nike's growth in North America, Europe, Asia Pacific, and Latin America topped 30%.
The message here is that even when faced with less buying power due to inflation, people continue to buy Nike. And Nike has shown it has the strength to manage challenges such as supply chain problems and higher costs. This makes it a great stock to own, no matter what the economy is doing. And that's why investors might snap up Nike shares this year.
2. Walt Disney
Disney's earnings disappointed investors last year. The entertainment giant added millions of subscribers to its streaming services -- but at the same time, costs soared, and the unit's losses deepened. This weighed on overall earnings -- in spite of growth at the parks, experiences, and products segment.
As a result, Disney shares sank more than 43% in 2022. But things may be about to change for the company.
Disney brought longtime chief executive officer Bob Iger back to get costs under control and spur growth. There's reason to believe he can do it. He has a solid track record. Iger led Disney through major acquisitions, launched blockbuster films, and helped the company increase earnings.
Today, Disney shares trade for 23.87 times forward earnings estimates -- that's half of their level a year ago. Here's why this is cheap. As mentioned, Iger aims to put Disney back on the right track -- and quickly. He's supposed to do it in just two years. And Disney's parks business remains strong.
All of these elements make Disney a great investment right now -- and investors may soon take notice.
3. Teladoc Health
Teladoc announced two billion-dollar noncash goodwill impairment charges last year. They were linked to its acquisition of Livongo in 2020. And that set Teladoc off for a disastrous year. The stock sank 74% in the 12-month period.
So why should we be optimistic about Teladoc now? The worst looks like it's behind the telemedicine giant. In the recent quarter, Teladoc's loss narrowed. The company also has continued to grow revenue and online visits in the double digits.
It's got an impressive client list -- more than half of Fortune 500 companies. And it continues to increase U.S. members and revenue per member.
As for Livongo, yes, the deal didn't pay off right away. But over time, it could. Livongo brought strengths in the management of chronic disease. This is a major growth area for telemedicine companies. That's because about half of Americans suffer from at least one chronic illness.
Right now, Teladoc shares are trading at their cheapest ever in relation to sales. This is an enormous opportunity for long-term investors. That's because Teladoc -- as a leader in the industry -- should benefit from the telemedicine market's spectacular growth over time.
