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8 Stocks That Are on Sale Right Now in 2020

Posted on Monday, October 22nd, 2018 by Chris Markoch
8 Stocks That Are on Sale Right NowOctober has lived up to its reputation as being one of the most volatile for equity investors. In addition to being a month historically known for profit taking, there is a confluence of events that are challenging stock prices. The tariff conflict continues to hang over the market, leaving investors to wonder how it will affect U.S. businesses doing business in China, and what will happen to the U.S. economy if consumers have to adjust to higher prices on imports. The market is also digesting higher interest rates, the consequences to businesses as they digest an economy that is reaching full employment and shrinking margins.

The phrase “perfect storm” can often be overused, but in October 2018, it may be the most apt description. The good news for investors is that after every time the market goes through these correction periods, there are exceptional buying opportunities – and many times the highest gains go to the investors who prudently buy during the dips. Think of it like buying next year’s holiday decorations on December 26. When investors buy stocks that are on sale, they can get both value and growth.

The same is true right now. It may not be the time to dive into the market with both feet, but there are buying opportunities. In this presentation, we're giving you eight stocks that are selling at a discount, but still, show the fundamentals to be great buying opportunities as we approach the fourth quarter earnings season.

#1 - Netflix (NASDAQ:NFLX)

Netflix logo

Netflix (NASDAQ: NFLX) - There is a psychology to many selloffs, and Netflix seems to fit into that pattern very well. The streaming content provider’s stock has dropped nearly 20% since mid-July. While some analysts may have had the stock overvalued, it’s fair to ask if the selloff has gone too far. Here’s why. For starters, Netflix seems to be taking a hit for wanting to be accurate. In three out of their last 10 quarters, the company has overestimated their membership growth. But they are still increasing membership, and a closer look shows that their membership growth in the first half of 2018 was significantly ahead of that from 2017. And the larger question is the story for Netflix is not about granular growth as measured quarter by quarter, it’s about how fast the company is growing. That is a story that shows a 40% year-over-year revenue increase and a 25% growth in streaming subscribers. Some analysts are projecting Netflix’s earnings per share (EPS) to grow by 60% per year for the next five years. All of those metrics don’t take into account their international growth. Membership worldwide has risen 40% year over year with revenue increasing by 65% over the same period. And Netflix has demonstrated an ability to raise their current prices while continuing to add new subscribers.

About Netflix
Netflix, Inc provides subscription streaming entertainment service. It offers TV series, documentaries, and feature films across various genres and languages. The company provides members the ability to receive streaming content through a host of Internet-connected screens, including TVs, digital video players, television set-top boxes, and mobile devices. Read More 

Current Price: $488.64
Consensus Rating: Buy
Ratings Breakdown: 25 Buy Ratings, 9 Hold Ratings, 5 Sell Ratings.
Consensus Price Target: $531.05 (8.7% Upside)



#2 - Facebook (NASDAQ:FB)

Facebook logo

Facebook (NASDAQ: FB) - Of all the FAANG stocks, Facebook may be the one that would seem to offer the least likely growth opportunity. There have been privacy concern issues, for sure. But for a stock that generates over 40 cents of every dollar into free cash, it seems analysts may want to take a second look. After all, Facebook bought back $5.1 billion of their shares in the first half of 2018 and it’s likely that they’ll buy back the same amount, or more, in the second half. Anytime a company is buying back its own shares, they believe that their stock is undervalued. And with Facebook, there’s reason to believe that story is true. And a big reason for that is Instagram, which Facebook owns. According to estimates, approximately 15% of the company's advertising revenue came from Instagram, which represents about $6 billion of the company's $40.7 billion top-line number for 2017. As Instagram’s ad revenue continues to increase in 2018, one analyst projects that Instagram’s ad revenue could account for 33% of Facebook’s overall advertising revenue by 2020. Which brings us back to the free cash flow (FCF) story, and that's the real game-changer for Facebook. The stock is currently trading at approximately 26 times its free cash flow. Even without a higher share price for two years, the anticipated free cash flow would have the company trading at 19 times FCF. That would be an awfully tasty number for investors.

About Facebook
Facebook, Inc develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and in-home devices worldwide. The company's products include Facebook that enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers; Instagram, a community for sharing photos, videos, and private messages; Messenger, a messaging application for people to connect with friends, family, groups, and businesses across platforms and devices; and WhatsApp, a messaging application that is used by people and businesses to communicate in a private way. Read More 

Current Price: $283.46
Consensus Rating: Buy
Ratings Breakdown: 41 Buy Ratings, 4 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $285.07 (0.6% Upside)



#3 - Alphabet Inc. (NASDAQ:GOOGL)

Alphabet logo

Alphabet Inc. (NASDAQ: GOOGL) - It almost seems absurd to put a company that’s trading at over $1,100 per share at this writing as being “on sale”. But that doesn’t change the fact that Alphabet, which is the parent company of Google is down from highs over $1,200 in early July. Unlike Facebook, there is no lack of transparency about where Alphabet’s revenue comes from. Google generates 86% of its revenue from advertising. Its Google Ad Words is the de facto standard for businesses that are becoming more dependent on digital media for their advertising spend. Google is still considered the industry’s leading search engine and they continue to see growth through YouTube. Google is also getting set to launch three new products (their Pixel 3 Smartphone, Pixel Slate tablet, and Home Hub device) that may allow the company to generate even more revenue. The company does face some headwinds related to their stated desire to push ahead with developing a censored search engine for China. The very fact that the company remains so committed to the project, even while there remains no guarantee that such a search engine would ever launch, speaks to the impact that expanding into the Chinese market would offer Google as they strive to become more competitive in other markets.

About Alphabet
Alphabet Inc provides online advertising services in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It offers performance and brand advertising services. The company operates through Google and Other Bets segments. The Google segment offers products, such as Ads, Android, Chrome, Google Cloud, Google Maps, Google Play, Hardware, Search, and YouTube, as well as technical infrastructure. Read More 

Current Price: $1,598.00
Consensus Rating: Buy
Ratings Breakdown: 42 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $1,686.58 (5.5% Upside)



#4 - Adobe (NASDAQ:ADBE)

Adobe logo

Adobe (NASDAQ: ADBE) - Yet another technology stock that merits a closer look despite the recent selloff is Adobe. The undisputed leader in cloud space technology is primed to benefit from an industry that is forecasting demand for cloud services to grow over the next 2-3 years. In their most recent earnings guidance, the company forecast 20% growth for its 2019 overall sales and digital media revenue. Unlike the FAANG stocks, Adobe made it through the tech sell-off in July relatively unscathed and the stock has continued to rise. In fact, some analysts have taken note of how Adobe has continued to rise in a sector where many companies have not. This is why many analysts are bullish on the stock’s prospects going forward and why, even with their stock trading at a record level right now, the best may be yet to come, which would make their current price seem like a bargain. Not only does the company pass the smell test from a fundamental analysis viewpoint, but the technical indicators look great as well. Their stock chart for 2018 shows rhythmic, symmetrical support and a stock price that has risen to new heights off support levels.

About Adobe
Adobe Inc operates as a diversified software company worldwide. Its Digital Media segment provides tools and solutions that enable individuals, teams, and enterprises to create, publish, promote, and monetize their digital content. Its flagship product is Creative Cloud, a subscription service that allows customer to download and access the latest versions of its creative products. Read More 

Current Price: $477.77
Consensus Rating: Buy
Ratings Breakdown: 23 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $507.96 (6.3% Upside)



#5 - Delta Air Lines (NYSE:DAL)

Delta Air Lines logo

Delta Air Lines (NYSE: DAL) - Airline stocks are always somewhat hard to forecast, but after a share price that dropped below $50 per share and still continues to trade about 10% off its year-to-date high near $60, it may be time for a closer look. One of the issues suppressing the stock, along with investor patience, is fuel prices. As crude oil prices continue to increase, investors have some reason to question whether or not the stock will grow. As a result, despite Delta’s optimistic projection of a significant increase in revenue per available seat mile (RASM) for the third quarter, some analysts are more concerned about the bigger picture for the stock. With higher fuel costs, at least in the short term, Delta will be hard pressed to meet its goal of a flat pre-tax margin (it had been negative). However, with a recently renovated fleet and the company's ability to keep non-fuel costs in line, investors who have the patience to ride this stock out until oil prices level out, or start to decline, may be rewarded with a stock that is looking to be selling at a nice discount.

About Delta Air Lines
Delta Air Lines, Inc provides scheduled air transportation for passengers and cargo in the United States and internationally. The company operates through two segments, Airline and Refinery. Its domestic network centered on core hubs in Atlanta, Minneapolis-St. Paul, Detroit, and Salt Lake City, as well as coastal hub positions in Boston, Los Angeles, New York-LaGuardia, New York-JFK, and Seattle; and international network centered on hubs and market presence in Amsterdam, London-Heathrow, Mexico City, Paris-Charles de Gaulle, and Seoul-Incheon. Read More 

Current Price: $30.78
Consensus Rating: Hold
Ratings Breakdown: 7 Buy Ratings, 10 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $45.47 (47.7% Upside)



#6 - Federal Express (NYSE:FDX)

FedEx logo

Federal Express (NYSE: FDX) - Federal Express seems to be an example of how you can always find something negative if you look closely enough. And analysts certainly seem to be doing just that. The stock has been steadily tumbling since reaching a high of around $275 in January. Before the recent sell-off, it was still trading around $250. Now, it's around $220 despite solid earnings. One of the reasons for this is the company's admission that the continuing trade conflict with China is hurting their business. But that alone shouldn't explain the precipitous drop. The company took the rather unique approach of saying that in future conference calls, they would stop reviewing individual sectors and focus on the company as a whole. Market analysts seem to be approaching this upcoming lack of information with the same disdain the media has to a Bill Belichick post-game press conference. The biggest challenge for FedEx going forward is a negative free cash flow and an aging infrastructure that will be a drag on profits and potentially allow Amazon to encroach on this space.

About FedEx
FedEx Corporation provides transportation, e-commerce, and business services worldwide. The company's FedEx Express segment offers shipping services for delivery of packages and freight. Its FedEx Ground segment provides business and residential money-back guaranteed ground package delivery services; and consolidates and delivers low-weight and less time-sensitive business-to-consumer packages. Read More 

Current Price: $275.00
Consensus Rating: Buy
Ratings Breakdown: 18 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $277.50 (0.9% Upside)



#7 - Freeport-McMoRan (NYSE:FCX)

Freeport-McMoRan logo

Freeport-McMoRan (NYSE: FCX) - Freeport-McMoRan is garnering a lot of attention from investors. One of the reasons for this is what seems to be a resolution for a deal surrounding its flagship mining property in Indonesia. That and the fact that CEO, Richard Adkerson, has announced a willingness to sell the company. That will always raise eyeballs. However, while that looks unlikely at this time, one thing that looks positive for the company is their fundamentals. All in all, with a market capitalization of around $17.7 billion, the company appears to be largely undervalued, and a look inside the numbers shows that the stock might be poised for a lift. The company’s most recent earnings report showed a healthy balance sheet with debt on the decline and a positive free cash flow of $827 million. The company also showed a slight increase in year-over-year earnings and sales and shareholders were able to retain $1.46 billion (or $0.60 per share). In the next fiscal year, the company is forecasting total earnings per share that would justify a stock price around $15.07 per share, well above where it is currently trading around $12 per share.

 

About Freeport-McMoRan
Freeport-McMoRan Inc engages in the mining of mineral properties in North America, South America, and Indonesia. The company primarily explores for copper, gold, molybdenum, silver, and other metals, as well as oil and gas. Its assets include the Grasberg minerals district in Indonesia; Morenci, Bagdad, Safford, Sierrita, and Miami in Arizona; Tyrone and Chino in New Mexico; and Henderson and Climax in Colorado, North America, as well as Cerro Verde in Peru and El Abra in Chile. Read More 

Current Price: $17.76
Consensus Rating: Buy
Ratings Breakdown: 10 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $17.00 (4.3% Downside)



#8 - General Electric (NYSE:GE)

General Electric logo

General Electric (NYSE: GE) - When you've hit the bottom, there's nowhere to go but up, right? That might be the cynical argument for buying General Electric. However, there is a brighter story. Their new CEO, Lawrence Culp, successfully turned around the industrial company Danaher and will bring the principles of the Toyota Production System (TPS) to General Electric. Can analytics make a difference? The company is betting on it and with good reason. GE has been trying, unsuccessfully to divest itself of their underperforming business units while identifying and growing their profitable ones. That is where Culp succeeded at Danaher and the thought is he can achieve similar success to GE. With a stock price currently around $12 a share, the stock has actually climbed around 13% since Culp was named to the position. While the stock may not be for the faint of heart, there does seem to be evidence of a bright future for GE shares.

About General Electric
General Electric Company operates as a high-tech industrial company in the United States, Europe, Asia, the Americas, the Middle East, and Africa. It operates through Power, Renewable Energy, Aviation, Healthcare, and Capital segments. The Power segment offers technologies, solutions, and services related to energy production, including gas and steam turbines, generators, and power generation services. Read More 

Current Price: $7.11
Consensus Rating: Buy
Ratings Breakdown: 9 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $9.27 (30.4% Upside)

 

Corrections are a part of every market, even a bull market like the one that investors are currently enjoying. During these times, there is always profit potential, because frequently corrections provide the opportunity for investors to buy great stocks while they’re on sale. This latest correction is no different. From tech stocks to manufacturing, there are some appealing stocks with great brand names that are now offering investors a chance to swoop in and add to their portfolio at attractive prices.

Just as October is a notoriously painful month for stock, the run-up to the Holiday season is typically a time when the market experiences some of its greatest gains. But as the saying goes, you can’t win if you don’t get in the game. These eight stocks look to be screaming “Sale” right now, making them strong options for you to consider in your portfolio.

7 Semiconductor Stocks to Power Your Portfolio

Semiconductor stocks are thought of as cyclical stocks. However as technology continues to evolve, the cycles for semiconductors have become almost indiscernible. And for the last 18 months, semiconductor stocks have been some of the most volatile stocks.

But the iShares PHLX Semiconductor ETF (NASDAQ:SOXX) is up nearly 17% (16.8%) in 2020. That far outpaces the S&P 500. And this is on the heels of 2019 when the normally “boring” index surged over 60%.

What are the catalysts for semiconductor stocks? At this point, the better question may be what isn’t a catalyst for this group. The 5G buildout looks to finally be underway despite the pandemic. Data centers keep on growing, new gaming consoles will be out later this year, and work from anywhere will continue to be the reality for many Americans.

Each of these segments will define the semiconductor industry for at least the rest of this year. And are likely to continue to dominate our national conversation long after the pandemic is over. But those aren’t the only catalysts. Online learning is going to increase in importance. And that means students will need the laptops and tablets that are capable of handling the speed and processing power needed for remote learning. And there’s still time for you to profit from this growing sector. In this presentation, we’ve identified seven of the best semiconductor stocks that still offer good growth opportunities.

View the "7 Semiconductor Stocks to Power Your Portfolio" Here.






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