(0:45) - Market Selloff: Finding The Stocks On Sale
(3:30) - Making A Wish List of Tracey’s Top Stock Picks
(16:20) - What Is The Earnings Outlook Going Forward
(21:15) - Episode Roundup: AMD, NVDA, WING, DPZ, CMG, PXD
Welcome to Episode #211 of the Value Investor Podcast
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
Just like that, as COVID cases rise in the United States and Europe and some government restrictions are back in place, the bulls have taken their gains off the table and moved to the sidelines.
Even the hottest industry, the semiconductors, is down about 5% over the last 5 sessions.
With some of the hot growth stocks seeing a pullback, maybe it’s time to put together a wish list of great companies that could get cheaper in the next few weeks?
They’re Not Cheap
No one would argue that any of these hot growth stocks are cheap. Nor are they values on the classic valuation method of P/E or price-to-book ratios.
But all five of these stocks are off their recent highs.
Why not buy stocks on sale?
5 Hot Growth Stocks for Your Wish List
1. Advanced Micro Devices AMD is up 66% year-to-date but it has fallen 6% over the last 5 sessions even after it reported strong earnings and announced it was buying Xilinx. Yes, it trades with a forward P/E of 71 but a further sell-off means the stock is on sale.
2. NVIDIA NVDA has been nearly untouchable for value investors since its spring coronavirus sell-off lows. Shares are up 114% year-to-date and it’s now trading at 58x forward earnings. But over the last 5 sessions it’s fallen 5.5%.
3. Wingstop WING has been one of the best performing publicly traded restaurant chains in 2020. For the second quarter, same-store-sales jumped 31.9% but it kept that momentum even after the lockdowns ended, adding same-store-sales comps of 25.4% in the third quarter. Not surprising, given the execution, shares were up 95% year-to-date over the summer, and hitting new highs. But they’ve retreated in recent months and are now down 9% over the last month. Should value investors be poking around?
4. Domino’s DPZ has also been a hot restaurant pandemic play. It’s app and delivery capabilities has translated into stellar same-store-sales, with third quarter US sales jumping another 17.5%. It hasn’t pulled back as much as some of the others, only losing 2% in the last 5 sessions. But if it pulls back further, is it a buying opportunity?
5. Chipotle Mexican Grill CMG launched its loyalty program, and grab and go capabilities, at exactly the right time. It’s also been one of the big pandemic winners but shares are the most expensive they’ve been in years, with a forward P/E of 119. Still, shares have lost 7.7% over the last 5 sessions. Should you buy Chipotle if you can get it on sale?
There are dozens of other companies that value investors could also have on their wish lists.
Find out more about keeping a wish list, and what should be on it, on this week’s podcast.
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Dominos Pizza Inc (DPZ) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
Wingstop Inc. (WING) : Free Stock Analysis Report
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