- These beaten-down bargain stocks have strong catalysts moving forward and are worth a look.
- Advanced Micro Devices (AMD): There’s plenty of upside momentum ahead for this severely undervalued tech stock.
- Marathon Digital Holdings (MARA): This undervalued Bitcoin mining is technically oversold, and ready to bounce with Bitcoin (BTC-USD).
- Lithium Americas (LAC): Oversold lithium miner could pop with demand still outweighing supply.
- Roblox Corp. (RBLX): Gaming stock showing signs of life again thanks to strong April numbers.
- Cameco Corp. (CCJ): Uranium stock that could see higher highs on increased demand.
- Costco Wholesale (COST): Beaten down big-box retailer has become oversold
- Microsoft (MSFT): Analyst just reiterated a buy rating on the tech giant with a price target of $411 a share.
Markets have been an absolute disaster lately. Over the last few weeks, the Dow Jones Industrials lost about 4,000 points. The NASDAQ lost about 3,000 points while the S&P 500 sank about 800 points. That’s all thanks to the Federal Reserve, sky-high inflation, uncertainties with Russia and growing fears of recession.
However, fear could soon turn into opportunity, as markets become wildly oversold and bargain stocks begin to surface. In fact, as we’ve learned from Warren Buffett, Baron Rothschild and Sir John Templeton, fear can often lead to riches. For example, Buffett tells us to be greedy when others are fearful, and fearful when others are greedy. Baron Rothschild tells us to buy when there’s blood in the streets. Sir John Templeton tells us to buy on excessive pessimism.
Also, it’s tough to ignore some of these bargain stock pullbacks.
In fact, here are seven bargain stocks you may want to consider right now.
|AMD||Advanced Micro Devices||$99.99|
|MARA||Marathon Digital Holdings||$10.57|
|COST||Costco Wholesale Corp||$427.80|
Advanced Micro Devices (AMD)
Since late November, Advanced Micro Devices (NASDAQ:AMD) fell from a high of over $160 to recent double bottom support around $83 a share. It’s also oversold on relative strength (RSI), MACD and Williams’ %R. From a current price of $99.99, I’d like to see it challenge prior resistance around $120.
Even better, there’s plenty of growth at AMD. In its most recent quarter, the company posted EPS of $1.13, which was well above expectations for 91 cents. Revenue hit $5.9 billion, up 71% year over year. It also beat expectations for $5.5 billion. In addition, the company said it expects $6.5 billion in sales in the second quarter. That’s also better than expectations for $6.38 billion.
Marathon Digital Holdings (MARA)
Bitcoin (BTC-USD) has become brutally oversold. After a nasty pullback from about $48,000 to $26,000, it’s showing signs of life again. It’s also incredibly oversold on RSI, MACD, and Williams’ %R.
Plus, most of the Terra USD (UST-USD) crash may have been priced into the crash, too. And crashing along with Bitcoin were Bitcoin miners like Marathon Digital Holdings (NASDAQ:MARA).
However, when Bitcoin starts to pivot higher, I expect for MARA to follow, as it typically does.
It’s also tough to ignore MARA at around the $10 level, especially when it’s growing. In its most recent quarter, MARA revenue soared to $51.7 million, a 460%-plus jump year over year.
It also produced 1,259 Bitcoin, a 556% increase year over year, as it increased its hash rate 449% year-over-year.
Lithium Americas (LAC)
With electric vehicle demand only accelerating, the lithium story is still red hot. In fact, I expect for the story to get even hotter, as lithium demand continues to outpace supply.
Consider this. First, governments all over the world want millions of electric vehicles on the roads. Second, major automakers are aggressively moving into electric vehicles.
However, there’s just not enough lithium supply. Even the International Energy Agency says, “The supply of critical minerals crucial for technologies such as wind turbines and electric vehicles will have to be ramped up over the next decades if the planet’s climate targets are to be met,” as quoted by CNBC.
That’s where a company like Lithium Americas (NYSE:LAC) may be able to help. With its Thacker Pass mine for example, “The Company continues to advance a feasibility study for Thacker Pass with targeted capacity of 40,000 tpa LCE and incorporating a second phase expansion to reach a targeted total capacity of 80,000 tpa LCE. Results of the feasibility study are expected in the second half of 2022,” as noted in a company press release.
Roblox Corp. (RBLX)
After slipping from about $79 in the middle of January to a recent low of $21.65, Roblox Corp. (NYSE:RBLX) is a steal here.
Sure, the company just lost 27 cents a share, which was more than expectations. Revenue and active users even came in lighter than expected. Worse, bookings came in a $631.2 million, which was down about 3% year over year. Net loss was up to $160.2 million. That’s all terrible news.
However, don’t write the stock off just yet.
According to CEO David Baszucki, as quoted by CNBC, “March was a very difficult compare. We were all locked down a year ago. We’re happy that in April, we’ve seen that start to turn around. We think longer term, we’ll see booking start to catch up with user growth.”
With that, RBLX stock is starting to pivot higher. We also have to consider that RBLX is well-positioned, with a potential $800 billion metaverse. Plus, analysts still love the stock, including Stifel analyst Drew Crum, who has a “buy” rating.
Cameco Corp. (CCJ)
With uranium prices set to push higher, Cameco Corp. (NYSE:CCJ). could be a standout winner. Oversold at $23.35, the stock is just starting to pivot higher from over-extensions on its RSI and MACD. From a current price of $22.15, I’d like to see the stock challenge $26, near-term.
According to John Ciampaglia, CEO of Sprott Asset Management, as noted by Kitco.com, “We think there is still a lot of runway left in the uranium price. There is a serious supply and demand imbalance in the market that can only be fixed with higher prices. Two years ago, you couldn’t have a conversation about nuclear energy. There was still a lot of fear in the market. Now everyone wants to talk about it. The conversation is just getting started as governments want clean, secure, and reliable energy.”
Cameco also just caught an upgrade from RBC analyst Andrew Wong, who now has a “buy” rating on the stock. The Russia-Ukraine war is a key factor, with Europe likely to invest more in nuclear power. We also have to consider that Russia supplies a good deal of uranium for nuclear power plants. If that supply takes a hit, prices would also rise.
Costco Wholesale Corp. (COST)
Costco Wholesale Corp. (NASDAQ:COST) sells products that consumers must have no matter how well or how poorly the economy is doing. Even better, earnings are solid. For its second quarter, the company saw EPS of $2.92 on sales of $51.9 billion. That was better than expectations for EPS of $2.76 on sales of $51.53 billion. Same-store sales were up 11.1%. Add in a dividend yield of 0.73%, and you have an attractive stock.
According to Barron’s contributor Teresa Rivas, “‘Near-term, the market may be underestimating the strength of Costco’s position with higher inflation’ wrote Jefferies analyst Stephanie Wissink, given that the overall results confirmed the company’s ability to handle this and other supply-chain related headwinds. She has a Buy rating and $650 target on the stock.”
Oversold with a dividend yield of around 1%, beaten-down shares of Microsoft (NASDAQ:MSFT) are oversold. Not only did it just catch support dating back to June 2021, it’s oversold on RSI, MACD, and Williams’ %R. From a current price of $256.96, I’d like to see it challenge resistance around $290, near-term.
Earnings have been strong, with the company delivering revenue of $49.4 billion, an 18% jump year over year. That was also above estimates for $47.5 billion. Also, Tigress Financial analyst Ivan Feinseth just reiterated a “buy” rating on the stock, with a price target of $411.
As noted by Barron’s contributor Karishma Vanjani, “Feinseth bases his upbeat rating on the belief that large and small enterprises will continue their adoption of Microsoft’s Cloud, Office, and Teams products as digitization accelerates. He also thinks the tech giant will see increasing gaming subscription success and pointed to the fiscal third-quarter results as evidence.”
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.