SPECIAL REPORT The Top 7 Stocks for 2024

7 Beaten-Down Nasdaq Stocks to Buy Before They Rebound


  • Investors who can ride out the short-term volatility are poised to find attractive Nasdaq stocks to buy at bargain valuations.
  • Baker Hughes (BKR): The leading name in oilfield services technology is benefiting from rising oil and gas prices.
  • Broadcom (AVGO): This growth-oriented chip name generates strong free cash flows and pays regular dividends.
  • Costco Wholesale (COST): All-time high membership renewal rate could be regarded as a positive sign in an inflationary environment.
  • Diamondback (FANG): The company is committed to providing at least 50% of free cash flow to stockholders via dividends and share buybacks.
  • Enphase (ENPH): The European Union and Biden administration are supporting clean energy efforts, providing strong tailwinds for the stock.
  • Microsoft (MSFT): The tech leader has an enviable portfolio that generates strong returns.
  • Tractor Supply (TSCO): This non-discretionary stock boasts a recession resistant business.
Nasdaq Stocks to Buy - 7 Beaten-Down Nasdaq Stocks to Buy Before They Rebound

Source: Shutterstock

Nasdaq stocks to buy is our topic for today. Many of these widely-followed shares have suffered significant year-to-date (YTD) losses on news of persistent inflation and interest rate hikes.

For instance, the tech-heavy Nasdaq 100 index is deep in the bear market territory, down around 26% so far in 2022. While macroeconomic headwinds continue to squeeze the hefty valuations of growth stocks, investors who can ride out the short-term volatility are poised to find attractive Nasdaq stocks to buy in the third quarter.

Despite growing fears for a recession, the bear market has ignited analyst calls to “buy the dip.” Many concur investing in beaten-down growth stocks with sound fundamentals could help create long-term wealth for many of our readers.

With that information, here are seven Nasdaq stocks to buy that could gain traction in July.

BKR Baker Hughes $29.53
AVGO Broadcom $490.31
COST Costco Wholesale $472.2
FANG Diamondback Energy $125.67
ENPH Enphase Energy $180.59
MSFT Microsoft $260.11
TSCO Tractor Supply $196.34

Baker Hughes (BKR)

Black oil barrel that reads "oil" on the side in a pool of oil with other barrels
Source: Shutterstock

52-week range: $19.23 – $39.78

Global energy tech play Baker Hughes (NASDAQ:BKR) offers a range of oilfield services to oil and gas companies. It serves customers through its oilfield services, oilfield equipment, turbomachinery and process solutions, and digital solutions segments.

The offshore oil technology leader released Q1 results on April 20. Revenue increased 1% year-over-year (YOY) to $4.84 billion. Adjusted earnings came in at 15 cents per diluted share, up 26% from 12 cents in the prior-year quarter. Cash and equivalents ended the period at $3.19 billion.

The war in Ukraine combined with strong demand for oil and gas continue to support energy names. Soaring crude prices lead to higher drilling activity, increasing demand for BKR’s services and equipment.

BKR stock has gained almost 25% YTD, and supports a 2.40% dividend yield. Shares are trading at 22 times forward earnings and 1.25 times sales. Wall Street’s 12-month median price forecast for Baker Hughes stock stands at $41.

Broadcom (AVGO)

broadcom (AVGO) logo outside office building
Source: Sasima / Shutterstock.com

52-week range: $455.71 – $677.76

Semiconductor heavyweight Broadcom (NASDAQ:AVGO) generates most of its revenue from wireless chips used in high-end smartphones. Its market share in the global chip industry is over 3%.

Broadcom released Q2 financials on May 26. Revenue soared 23% year-over-year (YOY) to $8.1 billion. As a result, adjusted diluted earnings per share came in at $9.07, up from $6.62 in the prior-year period. Cash and equivalents ended the quarter at $9 billion.

The chip name ended last year with a record backlog of $14.9 billion, implying a highly reliable cash flow stream through 2022. In addition, Broadcom is poised to benefit from a decade-long smartphone replacement cycle, in part driven by the global rollout of 5G technology.

Management anticipates generating roughly $8.4 billion in revenue during the third quarter. Additionally, the company has recently authorized the repurchase of up to $10 billion of stock through the end of 2023.

So far in 2022, AVGO stock declined 26%. Shares are trading at 13.9 times forward earnings and 7.2 times sales. Moreover, they currently generate a 3.3% dividend yield. Analysts’ 12-month median price forecast for Broadcom stock is at $690.

Costco Wholesale (COST)

A Costco Wholesale (COST) warehouse in Auburn Hills, Michigan.
Source: ilzesgimene / Shutterstock.com

52-week range: $379.21 – $612.27

Costco Wholesale (NASDAQ:COST) operates the second-largest warehouse club chain stateside. Among global retailers, the Costco brand is among the most valuable 10 brands.

The warehouse club announced Q3 results on May 26. Revenue increased 16% YOY to $51.6 billion. Despite cost inflation pressures, Costco increased diluted earnings per share to $3.04, up from $2.75 in the same quarter last year. Cash and equivalents ended the quarter at $11.2 billion.

Costco enjoys a loyal customer base. Membership renewal rates stand at an all-time high of 90% worldwide. Management is also working to increase the e-commerce presence.

Yet, COST stock is down 21% YTD yet remains up 16% over the past year. Shares are trading at 33 times forward earnings and 0.9 times sales. Wall Street’s 12-month median price forecast for Costco Wholesale stock stands at $546.50.

Diamondback Energy (FANG)

diamondback energy logo on its website to represent oil stocks
Source: Pavel Kapysh / Shutterstock.com

52-week range: $64.74 – $162.24

Energy group Diamondback Energy (NASDAQ:FANG) explores, acquires and develops oil and gas reserves in the Permian Basin in West Texas. With a market capitalization (cap) of about $22 billion, the energy play is likely to create shareholder value for many quarters.

Diamondback issued Q1 metrics on May 2. Revenue more than doubled YOY to $2.4 billion. Adjusted earnings per share came in at $5.20, up from $2.30 a year ago. Cash and equivalents ended the period at $149 million. Free cash flow (FCF) stood at $974 million.

The board plans to return at least half of the FCF to stockholders via dividends and stock repurchases. It increased the annual base dividend to $2.80, and the share price currently supports a 2.3% yield.

So far in 2022, FANG stock has gained more than 13%. Shares are changing hands at 5.1 times forward earnings and 2.8 times sales. Finally, the 12-month median price forecast for Diamondback Energy stock is $180.

Enphase (ENPH)

mobile phone screen with enphase energy logo on it to represent renewable energy stocks
Source: IgorGolovniov / Shutterstock.com

52-week range: $113.40 – $282.46

Enphase Energy (NASDAQ:ENPH) is known for its micro inverter-based solar and battery systems. In the “Renewable Energy Services & Equipment” segment, its market share is approaching 20%.

The energy company released Q1 financials on April 26. Revenue soared 46% YOY to a record of $$441.3 million. Adjusted earnings stood at 79 cents per diluted share, up from 56 cents in the prior-year period. Cash and equivalents ended the quarter at $1.1 billion.

Microinverter system shipments grew by 16% YOY, while shipments of energy storage systems increased by 187% YOY. The energy technology company boasts an impressive 40% gross margin, one of the highest in the solar space. Management anticipates revenue increasing at least 55% YOY to reach $490 million-$520 million in the second quarter.

The President Joe Biden administration’s decision to extend import tariffs to accelerate domestic production of clean energy offers solid tailwinds for long-term growth. Additionally, the European Union’s (EU) plans to reduce reliance on Russian oil and gas, along with significant support for alternative energy solutions, mean good news for Enphase.

ENPH stock is up 1% YTD. Shares are changing hands at 59 times forward earnings and 19 times sales. Meanwhile, the 12-month median price forecast for Enphase is at $240.

Microsoft (MSFT)

The Microsoft logo outside a building representing MSFT stock.
Source: Asif Islam / Shutterstock.com

52-week range: $241.51 – $349.67

Technology titan Microsoft (NASDAQ:MSFT) dominates the global desktop operating system (OS) market of around 74%. With a market cap of almost 2 billion, it is also the second most valuable company on the S&P 500 index.

In late April, Microsoft announced Q3 financials. Revenue increased 18% YOY to $49.4 billion. Adjusted diluted EPS surged 14% YOY to $2.22, up from $1.95 in the prior-year period. Cash and equivalents ended the quarter at $12.5 billion.

Server products and cloud services revenue increased 29% YOY, fueled by 46% growth in Azure cloud services. During the quarter, the company returned $12.4 billion to shareholders in share repurchases and dividends.

However, management cut its Q4 revenue and earnings expectations. Now, revenue is forecast to come in the $51.94-$52.74 billion range. Therefore, Wall Street is eagerly looking forward to the next earnings statement to be released in late July.

MSFT stock fell more than 26% YTD. Shares are trading at 24.5 times forward earnings and 10.4 times sales. The 12-month median price forecast for MSFT stock stands at $350.

Tractor Supply (TSCO)

The exterior of a Tractor Supply (TSCO) store
Source: James R. Martin/Shutterstock.com

52-week range: $166.49 – $241.54

Our final stock, Tractor Supply (NASDAQ:TSCO), is the largest operator of retail farm and ranch stores stateside. It primarily targets recreational farmers and ranchers and has little exposure to commercial and industrial farm operations. The group operates over 2,000 retail locations.

Tractor Supply released Q1 metrics on April 21. Revenue increased 8.3% YOY to 3.02 billion. Diluted earnings per share soared to $1.65, up from $1.55 in the prior-year quarter. Cash and equivalents ended the period at $405 million.

The retailer’s portfolio primarily consists of non-discretionary products like livestock and pet supplies, hardware, tools, and trucks. Comparable store sales increased 5.2% compared to 38.6% in the prior year’s first quarter.

In other words, Tractor Supply has been enjoying robust demand for its products. During FY’22, management anticipates net sales to come in the $13.6-$13.8 billion range.

So far in 2022, TSCO stock declined almost 21%. Shares are trading at 20.8 times forward earnings and 1.7 times sales. They also offer a 1.95% dividend yield. The 12-month median price forecast for Tractor Supply stock is at $245.

On the date of publication, Tezcan Gecgil, Ph.D., did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2022/06/7-beaten-down-nasdaq-stocks-to-buy-before-they-rebound/.

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