The current chaos that continues to roil the markets is creating a lot of headaches and material losses as major indices fall. It’s also creating top investing opportunities to capitalize as prices dip artificially low in some cases. That’s what we’ll be talking about today: Stocks to buy on the dip amidst all the current market chaos.
Buying on the dip comes with its own set of pros and cons, like just about everything else. The downside is that timing the market is often difficult. What looks like an attractive entry point can often be a false bottom. Yet, many investors are also aware that the pros outweigh the potential downsides.
Rebounds create returns, and those returns can often be substantial, especially in markets like we’re currently experiencing. Buying the dip is also a prudent strategy for those who engage in dollar cost averaging. Regular purchases, regardless of price, reduce the overall cost of ownership. So, it’s clear that owners of the stocks discussed below certainly have a strong case for buying on the dip.
Pfizer (PFE)
Pfizer (NYSE:PFE) stock is down more than 19% over the past year and 1.5% year-to-date.
That truth belies the rebound that the stock has undergone over the year. PFE shares had risen above $31 by late July, appreciating by more than 8% in the year by that date in time. The rebound was a strong indication that the pharma giant’s turnaround was in full effect.
However, it has been pulled back down into the abyss along with so many others of late. Don’t let that dissuade you from the opportunity at hand. Pfizer is enacting a post-pandemic turnaround, only it just gave back a few dollars of recent gains. That’s a blessing in disguise.
Second-quarter sales were $260 million higher than Wall Street had anticipated. That gave Pfizer the confidence to raise full-year revenue guidance higher to a range between $59.5 and $62.5 billion.
Pfizer has a deep pipeline of candidate drugs, recent acquisitions and dependable dividends that all speak to its value. That’s a value higher than its current price.
First Solar (FSLR)
First Solar (NASDAQ:FSLR) stock clearly represents an opportunity for investors. It’s up more than 28% in 2024. Yet, it has also cratered since mid-June. Even after rising by 28% this year, it still has another 30% higher to go based on consensus expectations. It’s much higher in the best-case scenario.
Anyway, there are fundamental reasons to believe First Solar is worth buying at the moment. One of them is the company’s forward P/E ratio, which is lower than its current P/E ratio. That means analysts believe its earnings will rise which should result in rising share prices as a result.
Another is that First Solar’s top line is expected to have doubled between 2022 and 2025. The company reported $2.62 billion in sales in 2022. That figure is expected to swell to $5.77 billion by 2025. Meanwhile, per-share earnings will have gone from -41 cents to an expected $21.66 in the black.
Broadcom (AVGO)
Take the opportunity to scoop up Broadcom (NASDAQ:AVGO) stock following the most recent downturn. The company hasn’t become one of the leading AI plays for nothing. It is providing strong top-line growth, bottom-line increases and strong dividends for the tech world. All of those factors suggest it will remain one of the better AI investments overall.
Broadcom designs, develops and manufactures chips and also sells semiconductor software. It’s also a company that is currently in hypergrowth mode. Just take a look at its most recent earnings report to confirm that fact. Revenues grew by 43% in the second quarter.
The majority of that growth was attributable to its acquisition of VMware, but even outside of that purchase, Broadcom still grew by 12%. Earnings could increase by 50% this year. The VMware acquisition has fundamentally strengthened an already strong company. Earnings are expected to increase by more than 25% in 2025. That means the strong earnings bump in 2024 isn’t simply a blip due to the acquisition. Overall, many signs point to AVGO as a stock very much worth buying on the dip.
On the date of publication, Alex Sirois 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.