When the stock market falls sharply, shares of many large companies are often put up for sale. This has been happening in spades lately. The stock market, measured by the S&P500recently fell around 21% from its 52-week high – while many stocks have seen their stocks implode by 50%, 75% and maybe even more.
Here are three companies you might want to invest in now that their stocks are at levels well below where they have been for some time.
Nike (NOPE 6.63%) is “the world’s leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sporting and fitness activities”. This is no surprise to most of us. You might be surprised to learn that the venerable Converse brand is now part of Nike.
Nike faces competition from companies such as Adidas and New Balance, and faces supply chain issues, like many other companies. And sales in a key market, China, are under pressure due to pandemic shutdowns. But Nike still has an extremely valuable brand – ranked 10th in the world with an estimated value of $41 billion, according to the folks at Interbrand.
Investors balked at Nike’s first-quarter report, which revealed inventories were piling up. But the report was not a total meltdown, with revenue and earnings beating analysts’ expectations. Shares of Nike have fallen about 47% from their 52-week high, and with a recent price-to-earnings (P/E) ratio of 27, considerably below the five-year average of 47, the price of the action is more attractive than it was months ago.
until it’s not a bargain price, so if you believe in Nike’s growth potential, you might buy into it gradually over time, hoping for lower entry points. Or you can just add it to your watchlist, waiting for a more attractive time to “just do it” and buy.
Comcast (CMCSA 3.81%) has grown into a massive media and technology company, focused primarily on connectivity, aggregation and streaming, with a recent market value of over $135 billion. You may not realize it, but its businesses and brands include Xfinity, Comcast Business, Sky, Universal Filmed Entertainment Group, Universal Studio Group, Sky Studios, NBC and Telemundo Broadcasting Networks, Multiple Cable Networks, Peacock, NBCUniversal News Group, NBC Sports, Sky News and Sky Sports, plus Universal Parks and Resorts.
Comcast’s recently released third quarter showed a 1.5% decline in year-over-year revenue. But free cash flow rose 4.7%, while adjusted net income rose 4.5% and net cash from operating activities jumped 13.9%. The company is investing in the growth of its Peacock streaming service, and its theme parks are doing well.
Some worry about slowing broadband growth and people continuing to cut cable in favor of streaming services, but others see an opportunity if Comcast gets rid of some companies and invests in higher-growth ones. fast, such as wireless and theme parks.
Comcast’s stock recently fell 42% from its 52-week high, causing its forward-looking P/E ratio to drop to 8.2 from its five-year average of 14.5. And as always happens, when a stock’s price goes down, the dividend yield goes up – and Comcast stock recently returned a solid 3.5%.
3. Alphabet letters
Alphabet (GOOG 2.72%) (GOOGL 2.63%) is a widely admired powerhouse, with a recent market value exceeding $1.1 trillion and a brand ranked #4 in the world (by Interbrand) and valued at nearly $252 billion. That, however, was not enough to keep its stock afloat in these volatile days. Alphabet shares recently fell nearly 42% from their 52-week high, presenting an attractive entry point.
Remember that Alphabet is much more than Google’s dominant search engine. Its universe includes the popular Android mobile operating system, as well as YouTube and Google Cloud. YouTube alone is a very valuable property, with users watching over a billion hours of content per day and YouTube advertising recently generating 10% of total revenue. Alphabet also owns the Google Play app store, smart thermostat maker Nest and Fitbit, among others. However, Google advertising still generates the bulk of its revenue – 79% in the third quarter of 2022.
CEO Sundar Pichai recently said, “We are refining our focus on a clear set of product and business priorities. powered by AI and new ways to monetize YouTube shorts.” Chief Financial Officer Ruth Porat said, “We are working to realign resources to fuel our highest growth priorities.”
There are plenty of other exciting growth stocks to consider for your long-term portfolio, and now is a great time to seek them out, when they have fallen to more attractive levels.
Suzanne Frey, an executive at Alphabet, is a board member of The Motley Fool. Selena Maranjian holds positions in Alphabet (A shares) and Alphabet (C shares). The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares) and Nike. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.
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