I anticipate that the sell off may continue for a short while. This is creating a buy opportunity for the long run. So I’d like to hear your thoughts in terms of the Best Buy Now. Preferably, I’d like to hear names that your are most bullish AND have been unjustly and severely punished in the sell off.
This is a great question. I waited until the weekend to respond so I could give it some thought. I especially like this part “AND have been unjustly and severely punished in the sell off,” as my stocks like WAB and MTZ are great companies, but haven’t been as severely punished in this bloodbath, and so aren’t the ones I’d necessarily add to now.
Here are my thoughts in roughly alphabetical order. Please remember they are only my opinions and I have no special degrees or licenses in this business. Please make sure that you decide for yourself. Remember that PE’s that I use are based on adjusted earnings always.
AFOP – we started talking about it at about $11.80, at which point it was grossly undervalued. It gradually worked up to $13.80 at which point they preannounced great sales and earnings and jumped to an intraweek high of about $16.90. They’ve now come back just to about $15.80, so while I added a little this week, they certainly aren’t a best buy now.
AMBA – is down 25% from its high. On no company specific bad news. Trailing PE is 24. Forward PE is of course even less. A choice for a buy now.
APPY – This is a little company and a very small position for me (1%). They were about $2.50 when they got the definitive results for the study involving their one product. The results were great. They anticipate quick FDA approval and the stock price rose to $3.30 on the news. They did a quick secondary (which means dilution) to raise money for commercializing the product. Then this three weeks of selling hit and the price has fallen back to $2.00 for a 38.5% drop, and 20% below where they were before the good news. If you don’t have any, it’s a best buy for a very small position.
BOFI – This is a best buy in my opinion. It’s down 24% even after coming back to $80 and its trailing PE is a very reasonable 24.7
CALL – I got interested in this company through someone else’s post on this board. It’s a great turn around story with new management and a total facelift. They have $2.89 in adjusted earnings, and a price now of $18.89, for a PE of 6.5. They are down about 23% from their high point recently. Granted that the end of the story has yet to be told, but I’d consider this one of my best buy nows.
CELG – great company, great price, and I’ve bought some recently. A buy, but probably not a best buy now.
CSGP – This is the Zillow of commercial real estate. Like Zillow, a very high PE ratio. Price has dropped from $207.50 to $155 in three weeks, over $50 and more than 25%. If you’d like to take advantage of the drop, just remember that the trailing PE is still quite high (60).
ELLI – The price has dropped from $32 to $24, a nice round 25%. $24 is really a very low-risk price for this company that has its field locked up. A best buy now, in my opinion.
HZNP – In three weeks price has dropped more than $5 from $17.40 to $12, or 31%. Only news being that they got another patent approved. They aren’t making money yet, but will be this year. Not a best buy now, but I’d say certainly a buy for a small position if you don’t have any.
INVN – I sold to raise money to buy stocks that had fallen more. Maybe a mistake, but that’s what I did.
JCOM – I started a position in JCOM this week, but not at all what I’d call a best buy.
LNKD – As you may remember, I sold out of my LNKD mostly about $240, saying it was too high. (It actually got as high as $260). Here it is, at $166, down more than 35% from the high and I restarted a position. Still a huge PE, and thus NOT a best buy.
MTZ – Has hardly budged with all the selling, so doesn’t qualify as a stock “severly punished”. I haven’t sold a share, but am buying other things at present.
P – I started a small position in Pandora two weeks ago, but it’s dropped 20% since then. Growing revenues over 50% each quarter but still low earnings and high PE. Risky and not a best buy now.
PSIX – Holding its own pretty well, so it doesn’t qualify as a “severely punished” stock.
SCTY – Has dropped an incredible 37% from $85 to $54. Future earnings are controversial so I don’t think I’d call it a best buy now, even though I like it.
SYNA – Has held up pretty well since it’s not a high flyer, with a PE of about 13 or so. It’s a good buy at this price but hasn’t been “severely punished” (down 16% from the top).
SZYM – Everything is going right with this company which could turn out to be a very major company as all its factories come on line. It’s down $4.00 from its high of $14.70 four weeks ago to $10.70 now. I’d consider it high priority.
TSLA – has held very well considering, and is still up near the top of its range.
UBNT – is sporting a reasonable 24.6 PE ratio, and is down almost $20, or 34%, from its high of $56.40 to $37.20. No bad news that I’m aware of. I’d consider it definitely a best buy now.
WAB – great company at a reasonable PE, but like MTZ, doesn’t qualify as it’s not been “severely punished” at all.
Z – I like it, but it’s near its recent highs and its at a very high PE, so doesn’t qualify as a best buy now.