Anthony Speciale Stock Market Analyst

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These Beaten Down Stocks are Starting to Turn Things Around

Today, I’m going to continue with our string of year-end gifts, as I’m going to give you some stocks that I think could be explosive in 2022. These are the kinds of gifts that will hopefully keep on giving you profits next year and well beyond.

I’ve gone back and picked out some special situations, where I’ve specifically looked for stocks that were brutally beaten down in 2021 with a share price that’s declined by a significant amount.

From there, I want to find the companies with solid financials, no chance of financial distress anytime soon and businesses that have fallen out of favor with the market.

Then, we limit our search to those companies that are seeing insider buying right now. Insiders know more about the company than anyone else, so if things are starting to turn around, they’re the ones in a position to know all about it.

eHealth, Inc.

First up is eHealth, Inc. (EHTH), which was a high-flyer not that long ago, as it reached around $130 a share at one point. This is an online platform that offers insurance policies from over 200 different companies.

They sell health insurance primarily to families, individuals and small businesses, but the real focus of their business has been Medicare products, including Medicare part B, Medicare advantage, Medicare supplement, prescription drug programs and all the other things senior citizens need to round out their health care coverage in addition to Medicare.

The company has had earnings misses, which has been a problem. And one of the biggest problems they had was having outside vendor agents selling the products. Those agents have absolutely no incentive to delay churn, and there’s actually an incentive for them to churn those policies around from company to company.

The renewal commissions get impacted that way, and that’s hurt eHealth over the past couple of years. They’re moving very quickly to bring as much of this business back in-house as possible, with employee agents in-house, which will cut down on a lot of the churn in their core insurance business.

Then, they’ve spent more on technology than any of their competitors to make it easy to sort, compare and find the health insurance coverage that you need to complete your family’s coverage.

We expect big things from this, as there are some activists involved here. Hudson Capital has two seats on the board. Starboard Value is also involved and pushing for change, possibly even a sale of the company.

The company has a new CEO with four decades worth of healthcare experience. One of his prior jobs was running Aetna’s Medicare/Medicaid and federal employee health insurance programs. They’re getting the right team in place and the right incentives to push this stock higher.

Insiders have noticed, and they are starting to buy stock. We’ve seen several fairly decent buys at higher prices, including by the new CEO. That bodes very well for the future.

A successfully executed turnaround should see this stock double or more in 2022. The balance sheet is in good shape, the insiders believe in the stock and the activists are pushing, so this stock could be a homerun in your portfolio over the next year.

Intellicheck, Inc.

Next up is Intellicheck, Inc. (IDN), which does identity protection. They work with credit card companies and banks but are increasingly moving into new areas like gambling, cannabis, stadiums and even the digital and online shopping world.

They have real-time verification of your identity, and they work with seven of the top credit card companies, 30,000+ retailers and about 60 law enforcement agencies around the country.

They scan your ID, interprets the barcode data, compares it to what’s in their databases and verifies whether it’s you or not. They also have a facial scanner to verify your face as well, which we’re seeing increasingly used in retail stores and cannabis dispensaries.

Business has stumbled a bit after a pandemic-driven surge in 2020 and the rise in identity theft while folks were locked down at home. The stock has sold off rather dramatically and has dropped over 50% in 2021.

But insiders think we’re at the end of the decline, and I tend to agree. The stock is down to the point where it looks like a bargain. There should be a huge earnings surge next year, and officers and directors have been consistent buyers of the stock this month.

Just a little bit of good news could bring momentum back into this stock and see it surge to two or three times the current stock price. We could see a bit of further weakness going into the end of the year as we see tax-loss selling take place.

But starting in January, IDN could turn back into the type of rocket ride that it was back in 2020 when the stock pretty much tripled.