We continue to maintain that the bear market is over and that this is an excellent buying opportunity for select stocks, notes Joe Cotton, editor of Cotton's Technically Speaking.
We are featuring 4 examples of stocks picks which we consider bargains, based on their current prices versus what they were selling for within the last 12 months.
Because the market could conceivably move much lower in a raging bear market, we would employ a strategy at this time of buying 50% of a particular stock now, and buying 25% more on each 25% decline from your original buy price.
Bank of America (BAC), thru its subsidiaries, provides banking and financial products and services for consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide.
It has a modest price/earnings ratio of 8.99, earns $3.51 per share and sports a dividend of $0.84 = 2.66%. Wells Fargo maintained its Overweight rating on 7/1/22 and Piper Sandler did the same. The stock is down 36% from its high of $49.38 on February 8, 2022 — just 5 months ago.
Walt Disney (DIS) operates TV under ABC, Disney, ESPN, FX, etc. and produces motion pictures under the Walt Disney, Twentieth Century, and Marvel — as well as it theme parks and streaming services thru Disney, Hotstar, ESPN, Hulu etc.
We consider the company to be speculative due to its high price/earnings ratio of 63.67. But since it is a quality growth company, and selling for less than half of its March 8th, 2021 price of $201.91, we consider it a good value. Morgan Stanley maintained its Overweight rating on 6/30/22 and Deutsch Band maintained its Buy rating on 6/6/22.
PayPal Holdings (PYPL) is a quality, out-of-favor, growth stock that is selling at only 23% of its previous price of $308 reached in July of 2021. It operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide.
The company provides payment solutions under the PayPal, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey and Paidy names. Recently it introduced the ability for consumers to buy products on time — in 12 monthly installments, which is a big deal.
Truist Securities maintained its Hold rating on June 30, 2022 and Credit Suisse maintained its Outperform rating on June 22, 2022. Selling at a PE ratio of 23.56, we think it’s a great, long term buy at this price.
Amazon (AMZN) is a huge, quality, long term growth stock that engages in the retail sale of consumer products and subscriptions in North America and Internationally. It offers programs that enable sellers to sell their products on its websites.
The company also provides cloud storage, database, analytics, and other services. It has a PE Ratio of 51.20. Redburn gave it a Buy rating and $270 price target on 6/29/22. UBS maintained their Buy rating on on 6/28/22. We like the stock.
