5 Perfect Stocks to Buy On the Dip
Now is the time to snap up stellar stocks from your wish-list while the market is looking so volatile. If you look carefully, there are some serious bargains to be made. Don’t have a wish list? No worries! Here I dive into five top stocks to buy that are all trading on the cheap right now.
As you will see, I use TipRanks’ data to ensure that all these stocks boast a “Strong Buy” Street consensus rating and big upside potential. So you don’t just have to take my word for it. I use the latest reports from top analysts to dive into the outlook on these five top stocks to buy.
On Monday, the Dow Jones Industrial Average closed below its 200-day moving average for the first time since June 2016. The catalyst? A further round of trade war fears — particularly for the tech sector. President Trump has threatened to slap $200 billion of tariffs on Chinese imports arriving in the U.S.
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“The market is trading more on sentiment than fundamentals lately, which means moves are likely to be fickle and short lived,” commented senior BNY Mellon strategist Liz Young. “We feel that while momentum around trade is escalating, we’re still in a place where it’s in every nation’s best interest to avoid that outcome, and that things could calm down as negotiations progress.” Plus: “the economy is still strong, data is moving in the right direction, and we don’t see this as the issue that will turn things around.”
So with this bullish analysis in mind, let’s take a closer look at these five stocks to buy now:
Stocks to Buy: Alphabet (GOOGL)
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Even internet king Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) has not escaped the current market jitters. GOOGL is currently trading lower (3.9% down in the last week). This is despite numerous bullish analyst calls. For example, five-star Monness analyst Brian White recently reiterated his GOOGL Buy rating. This comes with a $1,306 price target (15% upside potential).
White reminds investors that the three “Big Bet” areas for Alphabet include YouTube, Google Cloud and hardware. In May, for example, YouTube highlighted that over 1.8 billion logged-in users watched YouTube content each month. And now YouTube has received a powerful upgrade.
Google’s latest innovation is a new YouTube music streaming service. This should “further … [expand] the capabilities and reach of the YouTube franchise,” cheers White. “For Alphabet, we believe this new service will improve the company’s digital ecosystem and the stock is attractive at just 18x our CY:19 EPS projection (ex-cash).”
The ad-supported version of YouTube Music will be free while YouTube Music Premium (i.e., ad-free, the ability to download, background listening, etc.) will cost $9.99 per month. Moreover, Google Play Music subscribers ($9.99 a month also) will also receive YouTube Music Premium as part of their current package. So far, the initial launch encompasses U.S., Australia, New Zealand, Mexico and South Korea.
GOOGL scores a Strong Buy analyst consensus rating. In the last three months this breaks down into 22 buy ratings vs. just three hold ratings. Meanwhile, the $1,261 average analyst price target works out at 11% upside from current levels.
Stocks to Buy: Micron (MU)
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Red-hot chip stock Micron (NASDAQ:MU) is trading down over 7.9% on a one-week basis. Indeed, the company plunged 7% on June 25. So now is prime time to step in to a long-term success story. Bear in mind that on a one-year basis the stock is up 68%.
Five-star Benchmark capital analyst Mike Burton has just initiated Micron with a Buy rating. He sees the stock spiking 50% to $80.
“We believe MU has progressed from a ‘cash burn’ to a ‘cash return’ story in only two years, and we expect the stock to remain a cyclical growth name, generating increasing profits and cash flow on each respective high and low of the memory cycle,” Burton wrote.
He isn’t concerned about memory demand peaking. On the contrary: “We see little evidence of a supply glut in MU’s DRAM business heading into 2H18 (or until significant wafers are added due to structural tightness), and we are encouraged that its product roadmap extends another 4 generations to 1β.”
Most notably, Burton sees Micron as the clear leader when it comes to the 64-layer 3D NAND. This is a shift from Micron’s previous 3D NAND position as a cost and market share laggard.
Overall, MU — a Strong Buy stock — boasts 17 buy ratings vs. four hold ratings. The average share price of these analysts works out at $82.80 (56% upside potential).
Stocks to Buy: Agilent (A)
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Agilent Technologies (NYSE:A) has shed 2.5% from its share price over the last week. Agilent Tech develops devices for six key markets, from lab tools for doctors to chemical monitoring solutions for energy stocks. On a three-month basis the stock is down 7.5%. Even pre-correction, Agilent made a compelling investing proposition. But now, the stock has the added attraction of trading on the cheap.
Indeed, our data shows that A has 100% Street support right now with four recent buy ratings. Plus the average analyst price target of $83 translates into big upside potential of 35%. These analysts explicitly call out the recent weakness as a buying opportunity.
One of these analysts is Baird’s Catherine Ramsey. She has just attended Agilent’s analyst day and left the meeting with her bullish take on the stock confirmed. According to Ramsey, strong core growth and margin expansion will ensure long-term, above market performance. She has a $77 price target (26% upside potential) on A.
Meanwhile, five-star analyst Brandon Couillard notes that shares have been weak since Agilent’s earnings reports. However, guidance was maintained and the Jefferies’ analyst leaves his positive thesis intact. Like Ramsay, Couillard sees the pullback as a buying opportunity.
Plus Couillard adds that the shares don’t reflect the upcoming accretion from the pending AATI deal. Agilent snapped up genomics analyzer AATI back in March for a cool $250 million.
Stocks to Buy: PayPal (PYPL)
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PayPal (NASDAQ:PYPL) has slipped recently- on a one-week basis the stock is down 3%. So now is the time to jump in! Following on from PYPL’s largest-ever deal (for Swedish-based startup iZettle), it seems PayPal has developed a taste for dealmaking. The payments giant has just agreed to acquire Hyperwallet for $400 million as well as fraud prevention platform Simility for $120 million.
Top-rated Cantor Fitzgerald analyst Joseph Foresi gives the deals his seal of approval. “The [Hyperwallet] acquisition will increase PYPL’s ability to provide payment and e-commerce solutions to marketplaces around the world.” This is because “Hyperwallet provides an entrance into more than 200 markets worldwide and a multi-currency payment platform that allows for many disbursement options.”
He has a Buy rating and $93 price target on PayPal. And while this may suggest a higher multiple than PYPL’s peers, Foresi is confident that PayPal deserves the extra credit: “We value PYPL at a premium to the peer group, as it is growing about twice as fast as the industry’s average growth rate of high single digits and has expansion opportunities, in our opinion.”
Overall, as a Strong Buy stock, PayPal has received 17 buy ratings vs. only 4 hold ratings in the last three months. These ratings come with a $89 price target (9% upside potential). Plus you should note that top Wedbush analyst Moshe Katri recently added PayPal to the firm’s elite “Best Ideas” list. His $100 price target indicates 22% upside potential.
Stocks to Buy: Autodesk (ADSK)
This isn’t the first time I’ve covered Autodesk (NASDAQ:ADSK), and it’s unlikely to be the last. Autodesk is a 3D design company that operates in multiple industries. ADSK tech is used in every industry from construction to architecture to filmmaking. On a one-week basis, the stock is currently tracking down by 7.7%. Nonetheless, ADSK is still up by an impressive 23% year-to-date.
Top Oppenheimer analyst Koji Ikeda has just reiterated his ADSK Buy rating. He selects Autodesk as a Top Pick for June-July. “We believe the business is well positioned in a large but lightly penetrated construction industry that is yearning for next-generation technologies, like Autodesk’s, to help digitize the industry, which should act as a pillar for Autodesk’s next leg of growth beyond FY2020” writes Ikeda.
He notes that Autodesk reported good F1Q results with F1Q total revenue of $560M (+15% y/y, +18% ASC 605) coming in ~$2M above the consensus estimate.
In total, ADSK has unanimous Street support right now. In the last three months, Autodesk has received no less than 11 back-to-back buy ratings. These analysts see ADSK soaring a further 22% from these current levels.
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TipRanks offers investors the latest insight into eight different sectors by tracking the activity of 4,800 analysts, 5,000 financial bloggers and even 37,000 corporate insiders. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.
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