You may not agree with the market’s rebound or even the larger rally over the past couple months. But that’s what healthy markets do. Still, great stories can and often do get disconnected from broader price action. Today is no different and for investors that know where to look, there’s a sizable opportunity to pick up compelling growth stocks at a discount right now.
Many will argue there’s a ridiculous divide between a historic bull run spawned from an equally dazzling, but brief record-breaking bear market and what’s going on in the U.S. economy at large. And it sure seems that way. But the market is also importantly a forward-looking and fluid mechanism. Not that it’s always right. It is, until it’s not and that can happen in the blink of an eye. Last week’s nasty sell-off is obvious evidence of that.
More important, this week’s quick and well-bid, counter-attack finds the market once again challenging its pre-novel coronavirus levels. And in the case of an index like the Nasdaq Composite with its abundance of growth stocks, a new all-time-high set just last week is but a hair away. Like it or not, it is what it is and the price action only solidifies the bull case.
The good news for investors having difficulty swallowing the broader market rally is that Wall Street doesn’t roll out the red carpet uniformly. Believe it or not, there are still bargains even in today’s “mostly healthy” market environment. Individual stock corrections happen all the time.
Companies with compelling growth narratives aren’t immune either. Bearish phases in growth stocks can be deep and lengthy affairs. We’ve seen it happen to even the best and most dearly-held names, such as Netflix (NASDAQ:NFLX) or Amazon (NASDAQ:AMZN).
That’s great news for investors looking to add to their portfolios. These three growth stocks to buy are currently being overlooked by the wider markets:
The market is always right, until it isn’t. The technicals here give you a chance to get ahead of the competition.
Overlooked Growth Stocks to Buy: (BYND)
Source: Charts by TradingView
The first of our growth stocks to buy is meat-alternative maker Beyond Meat. Not that the substitute meat giant is completely unloved. In fact, shares are up an enviable 7% or so in Wednesday’s session and hitting new marginal highs for 2020. But investors haven’t seen anything yet.
The big picture for Beyond Meat looks great. The company was already well-positioned for existing secular trends. People want to eat healthier. Now though, consumers are increasingly aware of the health and sanitary benefits of plant-based, non-animal products in the wake of Covid-19.
Sure, real meat isn’t going away overnight, and there will be competition and lower margins in the future. But right now the bull case for Beyond Meat is heating up in a big way.
Technically, today’s gains are reaffirming a growth stock poised for outsized momentum. A look at the weekly chart shows that the 62% retracement level currently being challenged could act as a barrier.
But there’s always some line on a price chart to make investors blink, right? Moreover, Beyond Meat is trending nicely within the right side of its large corrective cup-shaped base. And with shares still more than 30% from its pattern and all-time-high, this growth stock is looking well-served for a purchase right now.
Source: Charts by TradingView
The next of our growth stocks to buy at a discount is Roku. The over-the-top streaming device champ has roughly doubled in price since hitting its coronavirus low on March 17. But don’t let those gains fool you: Roku stock is well-positioned to move higher.
A much-larger volatile correction starting last September helps make the case for a stock that’s under-loved but has put in the technical work to afford a more bullish outcome. Eventually, my forecast predicts new all-time-highs for this growth stock.
Getting more specific with the price chart today, investors have the opportunity to buy shares just above Roku’s confirmed monthly hammer pattern low, which formed the basis for a still developing larger cup base. With stochastics signaling a bullish crossover in oversold territory and shares stationed near the cup’s 50% retracement level, Roku is at the intersection of where a growth stock meets value on the price chart.
Source: Charts by TradingView
The last of our growth stocks offering compelling value is Livent stock. LTHM is a small cap with a valuation just north of $1 billion. And despite being a recent IPO, Livent never really caught the attention of Wall Street’s sell-side. But opportunity is knocking for those who care to listen.
This growth stock is an alternative energy play on the theme of a greener future. Livent is a lithium producer, and bottom-line, lithium is a key material for manufacturing rechargeable batteries, storing solar power or making that Tesla (NASDAQ:TSLA) or Ford (NYSE:F) EV vehicle parked in the driveway a reality.
While the growth narrative and future looks bright, Livent also already makes a little bit of coin. Pro-forma, Livent is already in the green. It’s not a lot but there’s certainly more substance to shares at this point than the hype making its way onto the price chart of battery-powered truck ‘designer’ Nikola (NASDAQ:NKLA). And technically, let’s just say our well-illustrated weekly view shows an investing vehicle that’s only now just turning the corner on a more friendly-looking bullish trend.
Disclosure: Investment accounts under Christopher Tyler’s management own Beyond Meat (BYND)and its derivatives but no other securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.