Identifying oversold stocks gives investors the opportunity to buy shares of high-quality companies at a discounted price. Long-term InvestorPlace.com readers will surely know that the Street may overreact to news and events in the short run.
For instance, the risk-off market sentiment in 2022 has wiped out about $7 trillion from the blue-chip stocks in the S&P 500 index. The Nasdaq 100 index has also plunged 21% year-to-date (YTD), leaving tech investors wondering what may be next.
Analysts concur that the recent market meltdown is fueled by investors who fear a recession looming around the corner. However, once the current macroeconomic headwinds dissipate and market sentiment turns positive, we’ll likely see many fallen stars shine again.
With that information, here are seven oversold stocks to buy in June with the potential for lucrative long-term returns:
|CRSP||CRISPR Therapeutics AG||$69.04|
|GILD||Gilead Sciences, Inc.||$62.54|
|GS||The Goldman Sachs Group, Inc.||$321.51|
|SWKS||Skyworks Solutions, Inc.||$108.64|
52-week range: $39.47 – $61.80
Comcast (NASDAQ:CMCSA) is a leading entertainment and telecommunications conglomerate. It is the domestic market leader in broadband internet subscriptions with a market share of over 40%. It also owns NBC Universal, Sky Entertainment, and several other assets.
When the media and technology giant released first-quarter results on April 28, it showed revenue grew 14% year-over-year (YOY) to $31 billion. Adjusted earnings hit 86 cents per share, up 13% YOY from 76 cents a year ago. Cash and equivalents ended the period at $8.9 billion.
Revenue for NBC Universal increased 47% YOY during the quarter, boosting overall top-line growth. However, streaming services continue to eat away market share from the linear cable TV business.
Wall Street was not pleased that net TV subscriber losses came in at 512,000, bringing down Comcast’s total to 17.7 million. Nevertheless, the addition of 4 million Peacock streaming subscribers compensated for the decline.
So far in 2022, CMCSA stock has declined 12%. It generates a 2.45% dividend yield at the current share price. Shares are trading at 11.7 times forward earnings and 1.6 times sales. The 12-month median price forecast for Comcast stock stands at $55.
CRISPR Therapeutics (CRSP)
52-week range: $42.51 – $169.76
The Switzerland-based healthcare group reported Q1 results on May 9. Revenue grew 74% YOY to $940 million. The net loss came in at $2.32 per diluted share, compared to $1.51 a year ago. Cash and equivalents ended the period at $2.22 billion.
Analysts concur that CRISPR has promising immuno-oncology therapy candidates in the pipeline. The biotech company has been collaborating with Vertex Pharmaceuticals (NYSE:VRTX) to develop CTX001, a potential therapy for sickle cell disease. Wall Street expects the duo to submit results for regulatory approval in late 2022.
The global market size for gene editing is forecast to grow at a compounded annual growth rate (CAGR) of 15.5% from 2022 to 2030. Such an increase would take the market size to $20 billion.
CRSP stock has lost 25% YTD and almost 50% over the past year. Shares are trading at 23.4x forward earnings and 4.8x sales. The 12-month median price forecast for CRISPR stock is at $113.50.
52-week range: $47.33 – $183.88
Crocs (NASDAQ:CROX) is a well-known manufacturer of footwear accessories. Piper Sandler‘s Taking Stock with Teens survey suggests that Crocs had become the sixth-most-popular footwear brand with the Gen Z demographic. A year ago, it was at number eight.
The footwear company announced Q1 metrics on May 5. Revenue increased 43.5% YOY to $660.1 million. Adjusted diluted earnings per share (EPS) increased 37.6% to $2.05, compared to $1.49 for the prior-year quarter. Cash and equivalents ended the quarter at $172 million.
Crocs boasts an impressive gross profit margin of 49.2%, helping the company cope with rising input costs. Management anticipates 2022 revenue to increase more than 50% YOY to $3.5 billion and surpass $5 billion in 2026.
Yet, CROX stock has tumbled 57% YTD. Shares are trading at a bargain valuation of just 5.4x forward earnings and 1.35x sales. The 12-month median price forecast for CROX stock stands at $120.
Gilead Sciences (GILD)
52-week range: $57.19 – $74.12
Biopharma play Gilead Sciences (NASDAQ:GILD) focuses on developing drugs that prevent or treat a range of diseases, including HIV, viral hepatitis, influenza, and cancer. With a market capitalization (cap) of about $80 billion, the healthcare company is likely to create more shareholder value in the coming quarters.
On April 28, Gilead announced Q1 numbers. Revenue grew 3% YOY to $6.6 billion. Diluted EPS increased 4% to $2.12, up from $2.04 in the prior-year quarter. Cash and equivalents ended the quarter at $6.8 billion.
Analysts have been watching the news on Gilead’s core HIV business. It contributed $3.7 billion to revenue during the first quarter.
Meanwhile, management is currently focused on gaining regulatory approval for lenacapavir. As opposed to a daily pill, lenacapavir could become “the first available 6-month, long-acting subcutaneous injection for the treatment of HIV.”
Moreover, the company recently announced news regarding its Covid-19 drug, Veklury: It has been approved for children under 12.
GILD stock has lost around 10% YTD. Nevertheless, it supports a generous 4.5% yield at the current stock price. Shares look reasonably valued at 9.8 times forward earnings and 2.9 times sales. The 12-month median price forecast for Gilead stock is at $68.
Goldman Sachs (GS)
52-week range: $293.90 – $426.16
Goldman Sachs (NYSE:GS) is one of the most important investment banking and financial services institutions worldwide. In terms of global investment banking revenues, it has the number two spot after JPMorgan Chase (NYSE:JPM).
The investment bank issued Q1 results on April 14. Revenue decreased 27% YOY to $12.9 billion. Diluted EPS stood at $10.76, down from $18.60 in the prior-year quarter. Global core liquid assets averaged $375 billion for the quarter.
Trading revenues in its fixed income, currency, and commodities business increased 21% YOY due to solid demand for related products. However, equity underwriting revenue fell 83% YOY as initial public offerings and special purpose acquisition company (SPAC) mergers declined significantly in 2022.
To enhance revenue diversity, the bank wants grow its asset and wealth management division. Another area of focus is the digital consumer bank, Marcus. The platform offers personal loans as well as savings accounts in the U.S. and U.K.
GS stock has dropped 17% YTD. Yet, it currently supports a 2.4% dividend yield. Shares are trading at 7.95 times forward earnings and 2 times sales. The 12-month median price forecast for Goldman Sachs stock stands at $420.
52 week range: $67.16 – $105.54
Tech group ITT (NYSE:ITT) manufactures highly engineered critical components. It also offers customized technology solutions for a range of industries, such as aerospace and defense (A&D), chemical, energy, and transportation. With a market cap of $6.3 billion, this mid-cap play could see significant growth in future years.
On May 3, ITT released Q1 metrics. Revenue increased 4% YOY to $726.2 million. Adjusted EPS came in at 97 cents, down from $1.06 per share in the previous year. For fiscal 2022, ITT forecasts its organic sales to grow 9% to 11% YOY.
Management has been investing in product innovation across its friction technologies, connectors, and pump businesses. Its acquisition of Habonim could boost offerings in the cryogenic and hydrogen ball valve space.
ITT stock has declined 27% since the start of the year. Shares are trading at 15.2 times forward earnings and 2.1 times sales. The 12-month median price forecast for ITT stock stands at $100.
Skyworks Solutions (SWKS)
52-week range: $97.59 – $197.62
Skyworks Solutions (NASDAQ:SWKS) offers semiconductors for wireless handsets as well as other devices supporting wireless connectivity. Among its largest customers are Apple (NASDAQ:AAPL) and Samsung. In fact, Apple accounts for over half of revenues.
The chipmaker reported Q2 metrics on May 3. Revenue increased 14% YOY to a record $1.34 billion. Adjusted diluted EPS came in at $2.63, up 11% from $2.37 in the prior-year quarter. Cash and equivalents ended the period at $656.4 million.
Wall Street noted that Skyworks benefited from growing chip demand from leading smartphone original equipment manufacturers (OEMs). Given the increased adoption of 5G networks and smartphone upgrades, this momentum could continue in the coming quarters.
Revenue from its non-smartphone business grew 36% YOY to a record $523 million, generating 39% of total revenue. Skyworks is expanding its footprint in high-growth markets, including the Internet of Things (IoT), automotive, and wireless connectivity.
So far in 2022, SWKS stock has tumbled almost 32%. It currently supports a 2.1% dividend yield. Shares have a cheap valuation at just 9.1x forward earnings and 3.2x sales. Finally, the 12-month median price forecast for Skyworks stock stands at $145.
On the date of publication, Tezcan Gecgil 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.