July 6, 2026 (Maple Hill Syndicate) The stock market roared ahead 15% in the second quarter, but some stocks missed the party.

How about some cake and punch for Devon Energy Corp. NYSE:DVN? It fell 17% in the quarter, but I think it deserves a better fate. I feel the same way about four other stocks profiled below.

At the end of each quarter, I compile a Casualty List of stocks that were beaten up in the three preceding months, and that I think have a lot of comeback potential.

Here are my latest Casualty List recommendations, along with the list's track record.

Devon Energy

Devon Energy, based in Oklahoma City, Oklahoma, produces oil and natural gas in several regions of the U.S. Energy stocks did poorly in the quarter, as a cease-fire in the war between the U.S. and Iran caused oil prices to drop.

I remain positive on the energy group. The Middle East is always trouble-prone, and I think lingering uncertainty will keep the price of oil above $80 a barrel for most of the next few years. It's at $69 at this writing.

About 58% of Devon's production is natural gas or natural gas liquids. I believe that natural gas will continue its recent growth in energy market share, at the expense of coal and oil.

Devon shares sell for only seven times recent earnings a bargain in my book.

Smithfield Foods

Smithfield Foods Inc. (SFD), based in Smithfield, Virginia, raises hogs, sells fresh pork, and sells packaged food products such as hot dogs, ham and bacon. This has never been an easy business. For example, the company has been criticized and sued over its waste-disposal practices.

A newer challenge is the tariff wars. Smithfield exports products, including pig heads, hearts and stomachs, to China. Trade friction has escalated under President Trump.

Despite the challenges, Smithfield has shown a profit in each of the past 10 years. The stock, down 11% in the second quarter, sells for just under 10 times earnings.

Photronics

As semiconductor chips and their components become ever smaller, the process of making them becomes even more demanding. I believe that Photronics Inc. (PLAB), which makes photomasks used in chip manufacture, is well positioned to benefit.

Photronics, based in Brookfield, Connecticut, is debt-free. And its stock thrown for a 19% loss in the second-quarter tech stock correction sells for less than 14 times earnings. Earnings growth ground to a halt in the past four quarters, but has averaged more than 30% over the past five years.

Insteel

Insteel Industries Inc. (IIIN) makes steel bars and mesh used to reinforce concrete structures such as bridges and tunnels. The U.S. is in the process of slowly upgrading its infrastructure, and I expect that trend to continue.

In the past four quarters, Insteel's sales jumped more than 20%, and earnings about 81%. Yet the stock fell 10% in the second quarter, when first-quarter earnings, announced in April, disappointed investors.

This small-capitalization stock, barely noticed by Wall Street, sells for about 14 times earnings.

GigaCloud

From Montebello, California, comes GigaCloud Technology Inc. (GCT), which is an online shopping and shipping platform for businesses dealing with large-parcel merchandise. In the second quarter, its stock fell 30% amid a broad correction in technology stocks.

GigaCloud's profit margins have shrunk a bit lately. Nonetheless, its net profit margin has remained above 10%, and its return on equity has been running at 32% lately.

The stock is selling for about $33 a share, and the few analysts who cover it expect it to be at $40 to $73 within a year, with a mean estimate of $53.

Performance

This is the 93rd Casualty List I've compiled, from June 2000 to the present. One-year returns can be calculated for 89 lists.

The average return on my Casualty List recommendations has been 16.1%, beating the Standard & Poor's 500 Total Return Index, which averaged 12.0%.

Bear in mind that my column results are hypothetical and shouldn't be confused with results I obtain for clients. Also, past performance doesn't predict the future.

Fifty-seven of the 89 sets of recommendations have been profitable, but only 42 have beaten the index.

My list from a year ago was one of the more successful ones, racking up a 47.3% return, with gains of 105% in Centene Corp. (CNC) and 102% in Helmerich & Payne Inc. (HP). Kraft Heinz Co. (KHC) returned a feeble 3.6%, while Sylvamo Corp. (SLVM) lost 22%.

Disclosure: I currently have no positions, personally or for clients, in the stocks discussed in today's column.

John Dorfman is chairman of Dorfman Value Investments LLC in Boston, Massachusetts. He or his clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.