Stocks to Buy Before They Join This Market Rally: Snap (SNAP)
YTD Performance: -18%
To be fair, Snap Inc (NYSE:SNAP) is still trading above its $17 IPO price. But for investors not fortunate enough to get an early entry into SNAP stock, the opening price was $24, and the stock hit $26 before retreating.
Current levels below $20 imply nearly 25% downside from those levels.
It might seem too aggressive to have Snapchat’s parent on this list. After all, sentiment toward the stock remains sharply negative. Seemingly every analyst whose firm wasn’t a part of the initial offering has questioned SNAP’s valuation. Short sellers quickly targeted the stock.
But that might set up a contrarian opportunity.
There are catalysts for SNAP stock, after all. And it’s worth remembering that Facebook Inc (NASDAQ:FB) was considered a flop not long after its IPO — itself widely considered a disaster. In August 2012, FB stock fell under $20, and the Los Angeles Times asked if Mark Zuckerberg was “in over his hoodie.” With Facebook stock at $140 less than five years later, no one’s asking that question.
It’s true that Snap might not be the next Facebook. But it doesn’t have to be to drive near-term gains. If the broad market continues to rally, SNAP will, ahem, snap out of it and join in soon.