The Bears Are Out in Full Force
Is anyone else tired of hearing how bearish everyone is getting? It’s easy to have that opinion when the market is in a correction. After all, even a broken clock is right twice a day. The bulls have been in control for so long that the bears are jumping at the opportunity to be right. Maybe we are in a bearish market now. No matter what side of the fence you are on, it’s hard to argue against the fact that a lot of stocks are oversold right now.
Growth stocks in particular have been hammered. A rising interest rate environment will do that as it slashes future revenue multiples. But some stocks are trading at pre-COVID levels so are we really factoring in zero growth over the past two years? Even the most bearish traders can’t ignore that fundamental aspect of the sell off. This could be a generational opportunity to buy stocks at all-time low levels, as long as you choose them right. So here are three stocks I’m buying at their current prices.
For a stock that revolves around global travel, Airbnb held up pretty well during the past couple of years. It’s down about 30% so far this year, but honestly, that’s not bad compared to the losses of some other tech stocks. Revenue in the first quarter rose by 70% year over year, and free cash flow hit $1.2 billion. Business is good for Airbnb, but the stock price is trading near all-time low levels. If you believe in the future of travel and accommodations, then Airbnb is a no-brainer to add at these prices.
Sea Limited (NYSE:SE)
Here’s a stock that has been beaten down by more than 65% so far this year. It probably got ahead of itself when it was trading near $400 per share, but I think we can also agree it shouldn’t be this low. It’s still not a profitable company and this market is punishing that right now. But earnings in the first quarter were better than expected and this high growth, multi-segment company is trading at a price to sales ratio of just 3.97. This is a classic example of a stock that has been dragged down too far. It still has all of its legs to stand on including the Shopee eCommerce division and the Garena mobile gaming segment, which management expects will bring in nearly $9 billion in revenue for the rest of the year.
Nio is a Chinese EV maker that simply has too many tailwinds working for it this year. The company released several new models for the first time in years, and is fully expanding into Europe after recently selling its 500th vehicle in Norway. Nio is also building its second production facility and also announced a mass market line of vehicles to start production in 2024. Nio is also in discussions to begin selling its battery swap technology to competitors and is about to debut its stock on the Singapore Exchange which will raise even more capital. Nio was driven down by fears over Beijing regulation and the Shanghai lockdowns. Now that it seems like both of those are in the company’s rear view mirror, Nio’s stock is still trading at a discounted price.