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As we head into the slower summer months, and with earnings season now behind us, investors and traders may want to brace for a period in which the stock market is likely to lack any meaningful catalysts. The incredible run that stocks have been on has been fueled almost entirely by strong corporate earnings – or, microeconomic forces. However, with corporate news flow and earnings releases expected to dry up, it is probable that the macroeconomic picture will become more in focus. That is not a positive for the market, and could ultimately result in a pull-back for the stock market this summer.

The looming budget battle and negotiations surrounding the debt ceiling in Washington threatens to cause more disarray and worry in the markets. The ongoing and worsening debt problems in the euro-zone could derail the Euro, sending the dollar higher, and consequently, stocks lower. Furthermore, oil and commodity prices continue to remain high, pinching consumers and corporations bottom lines. With these factors in mind, I have taken a much more cautious approach, and have moved away from growth names, and towards unloved, out-of-favor stocks that look like relative bargains and should have a more favorable risk-reward profile.

One such stock is the Goldman Sachs (GS), long held as the class of all Wall Street investment banking firms. The stock has been clobbered in 2011, down 20% from its best levels of the year, set in mid-January. As has been widely publicized, the firm has come under increasing scrutiny regarding its role in the subprime mortgage disaster – specifically, allegations of purchasing low quality loans, repackaging them, and selling them to its own customers. Not only has the stock and company been hit by an onslaught of bad publicity, but there is real concern that it faces more litigation from the DoJ. Furthermore, there is a level of uncertainty regarding whether its CEO, Lloyd Blankfein, will be forced, or will choose to step down.

While these issues have created a cloud over the stock, it is hard to dismiss the fact that this Wall Street stalwart is trading with a 1-year forward P/E of around 7x. The stock also happens to be trading at a key support level around the $140 level. With sentiment so clearly negative on this stock, it may be an opportune time to pick up shares of an industry leader at a discount. Prior to entering a trade, we would urge our readers to first review our trading report on GS, which can be accessed by clicking on its ticker above.

Another industry leading stock that is suffering greatly from negative sentiment is Cameco (CCJ) – the world’s largest miner and producer of uranium. It wasn’t too long ago that the growth prospects for CCJ and other uranium miners were very strong, and investors were flocking to these stocks. The primary catalyst for the expected burst in growth was that emerging economy countries, such as China and India, are ramping up their use of nuclear energy to meet their increasing energy needs. However, since the devastating earthquake and tsunami struck Japan on March 11, and caused a nuclear crisis not seen since Chernobyl in 1986, uranium stocks have been absolutely decimated. CCJ, for instance, is down 27% since then. After the earthquake hit, governments around the world, including China, have commented that they are re-thinking their nuclear energy plans.

On May 6, CCJ reported weak Q1 results and FY11 guidance. EPS and revenue dropped by 32% and 6% year-over-year, respectively, and the company stated that it may see delays in shipments in the near-term. However, from a longer-term perspective, the outlook for uranium still looks quite favorable. Countries such as China and India will still need to rely on nuclear energy or a good portion of their energy needs. In fact, CCJ commented in its earnings press release that a number of countries have already reaffirmed that building new nuclear reactors is an essential piece of meeting their energy demand. Analysts’ FY12 estimates still call for good growth, projecting that its earnings will increase by 27%. CCJ shares also seem to have found a floor, and its valuation is very reasonable. There are overhead resistance areas to be aware of, though, should the stock continue to climb higher. To learn about those, and all of CCJ’s key trading levels, please click on its ticker symbol above.

In the technology space, there probably isn’t a more unloved stock right now than networking giant Cisco Systems (CSCO). The company’s quarterly results have consistently disappointed investors, it has lost market share, it is highly exposed to the weak government sector, and there are calls for its CEO to resign. Things couldn’t get much worse, which explains the 32% nose-dive in the stock since last November. However, the company is in the early stages of implementing a turnaround, which includes a large round of layoffs, and pruning underperforming businesses, in order to simply and streamline the company. The company faces some heavy lifting over the next few quarters, but, it may be most profitable for investors to get in now, rather than waiting to see the pay-off from these initiatives down the road. CSCO shares are trading with a miniscule forward P/E of under 10, as well.

Lastly, investors would be hard-pressed to find an industry more out of favor than airlines. The culprit, of course, is nagging high fuel costs that are gouging airliners margins. Southwest Airlines (LUV), a perennial favorite among investors and consumers alike in this space, has been under notable pressure, underperforming many of its peers. Recall that in early April, LUV announced that one of its flights was diverted due to a loss of pressurization in the cabin, due to a hole in the top of the aircraft. This caused the company to cancel upwards of 300 flights to allow it to inspect its aircraft. The stock was consequently punished over the following days. Recently, however, the stock has been inching higher, and is approaching a key resistance level in the $12.80-$13.00 level. Should LUV break through that zone, further upside could be in store. I’d also point out that its FY12 EPS expected growth rate currently stands at 64% -- not bad for a stock many would consider a "value play."

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Source: A Few Out-of-Favor Leaders to 'Bear' in Mind