It’s always wise to have spare funds whenever earnings season rolls around. Inevitably, a handful of companies will deliver disappointing quarterly results, or a dim near-term outlook, leading investors to dump the stock.

On some occasions, the selling is massively overdone, and if you are willing to be patient and let the bar reset for a quarter or two, then some of these stocks can post an impressive snapback rally — once the forward view has begun to strengthen.

With that in mind, I took a look at all the stocks in the S&P 400, 500 and 600 that have slid at least 15% over the past month. Most look like dead money, but a few now hold clear appeal, especially since they have catalysts in place for a better 2015.

Pain In The Oil Patch
Of course the energy sector has been the biggest loser this earnings season. Until recently, oil appeared to stabilize in the $80 a barrel area, though we’ve now breached that level and a move toward $70 may be the end result. As I’ve noted on several recent occasions, a wide range of oil-related companies would still fare well, even at $70 oil, but as long as a floor is not yet in for oil prices, these stocks may not have hit bottom. Still, it pays to keep an eye on the fast-moving events in this sector, because if OPEC or others take steps to stabilize oil prices, then these stocks will be set up for a rally.

Looking beyond the energy sector, there are plenty of other earnings season casualties. Some companies are clearly to be avoided. For example, now that the multi-year trend of gun buying appears to have cooled off, it’s hard to spot positive catalysts for gun makers such as Sturm, Ruger & Co., Inc. (NYSE: RGR) or outdoorsman-focused retailers such as Cabela’s, Inc. (NYSE: CAB). And as I recently wrote on our sister site Profitabletrading.com, retailer J. C. Penney Co., Inc. (NYSE: JCP) is already losing altitude from a much-touted turnaround.

 
Yet a pair of stocks have caught my eye as they have the potential to sharply reverse course in 2015.

NetScout Systems, Inc.  (Nasdaq: NTCT)
Quarterly results aren’t to blame for this network management firm: NetScout always tops estimates and delivers solid guidance — doing so again in late October. Instead, investors fret a proposed massive acquisition that will radically transform this business model. NetScout has historically focused on software that helps scan networks for any early signs of trouble, in a niche known as packet detection. Yet a decision to acquire complementary technologies that are owned by Danaher Corp. (NYSE: DHR) is causing shareholder indigestion.

The acquisition makes sense for both sides. Danaher’s primary focus is on industrial markets and not IT management. The sale allows management to better focus on the company’s core strengths. Analysts at DA Davidson see the move as a win for NetScout as well: “Although a fairly large bet by NTCT, we believe the larger scale and reach of the combined company will enable it to address many new markets with its Adaptive Session Intelligence (ASI) technology.” They think that once investors better appreciate the synergies of the deal, shares will rebound to $48 from a recent $37, and as NetScout moves onto a firmer growth path, they see shares rising to $67 over the next five years.
 
Christopher & Banks Corp. (NYSE: CBK)
Despite an improving national employment outlook, retailers are still feeling more headwinds than tailwinds these days. Shoppers aren’t yet back in the mode of impulse buying, which led this women’s apparel seller to recently trim fiscal third quarter sales guidance by around 6%. The fact that shares plunged 30% on that news tells you that investors are in an unforgiving mood.

Yet it’s hard to overstate the impressive turnaround strategies implemented by CEO LuAnn Via. She took the reins in late 20102 and subsequently managed to restore the retailer back to positive operating income territory (after five straight years of operating losses). The gains stem from better merchandising and the closure of underperforming stores. And with many of its current stores coming up for lease over the next 6-to-8 quarters, management is likely to cull a few more underperformers from the base, while negotiating better rents at existing locations (now that mall operators are keen to avoid any more tenant losses).
 
Prior to the economic downturn, Christopher & Banks consistently generated industry-leading sales-per-square-foot trends, and was historically quite profitable (earnings per share were typically in the $0.75-to-$1.00 range). As is the case with many retailers, the slow economy led to subpar metrics ever since. But in light of the company’s strategic revamp and the eventual tailwinds that will accrue from a firmer employment backdrop, this stock could be back in double-digits in 2015.
 
Risks To Consider: These stocks lack near-term catalysts and may take several quarters to regain traction.
 
Action To Take –> Both NetScout and Christopher & Banks have been sold off in the face of near-term challenges. But both firms have strong management teams and are setting the stage for more robust financial metrics in 2015 — and beyond. Look at the temporary slump as a chance to pick up shares at a discount.

Another one of the best types of stocks to buy during earnings season and hold through any market (even a correction) are companies with the highest “Total Yield.“ This is calculated by combined a stock’s dividend yield, stock repurchases and debt reduction. Not only has the strategy returned an average of 15% per year since 1982, but it’s outperformed the S&P during the “dot-com” bubble and the 2008 financial collapse too. To learn more about his “Total Yield” investing strategy, click here.