3 Large-Cap Oversold Stocks to Watch Out For
07 Outubro 2021 - 7:24AM
Finscreener.org
The equity markets have turned
volatile in the last few trading sessions as investors are worried
about rising inflation and interest rates as well as a slower than
expected economic recovery.
But a market pullback also allows
investors to buy additional shares of fundamentally strong
companies. Here are three large-cap stocks that have fallen
into the oversold category due to recent market
turbulence.
Adobe Inc
PDF creator
Adobe (NASDAQ: ADBE)
is a cloud software powerhouse that makes various kinds of creative
and designing software. Its portfolio of offerings includes popular
software such as Photoshop, InDesign, Premiere, etc. With
a market cap of nearly
$270 billion, the company is a market leader in the creative cloud
space, a sector that is gaining significant traction from the
explosive growth of digital marketing.
This large-cap stock has been a
pretty good performer and over the past 5 years has even returned
440% to investors. However, since last year the stock has been
lagging well behind the benchmark, and is oversold right now, given
shares are down 15% from record highs.
ADBE stock is currently trading
at 46 times its forward earnings, making it less attractive to
value investors. Yet, most market analysts expect its earnings per
share to grow by more than 23.5% this year. In the next five years,
Adobe’s earnings are forecast to rise at an annual rate of
18.5%.
Johnson & Johnson
Johnson & Johnson (NYSE:
JNJ) is a mature company
that manufactures and sells a range of healthcare products. It is
popular among value investors due to reasonable metrics and a
strong balance sheet, allowing the stock to return over 50% in the
last five years.
Despite delivering impressive
quarterly performances, the stock has barely moved this year, and
its year-to-date gains is less than impressive. It is also one of
the oversold stocks in the market at present and is trading 11%
below all-time highs.
The company expects its current
year sales to range between $93.8 billion and $94.6 billion,
indicating a year-over-year increase between 13.5% to 14.5%. Also,
last month, the company announced it would issue booster doses for
its COVID-19 vaccine, which will continue to be a key driver of
top-line growth.
Johnson & Johnson is a strong
brand with even stronger cash-generating abilities. The company is
consistently profitable and offers investors a forward yield of
2.7%, making JNJ stock attractive to income
investors.
Abbott Laboratories
Abbott Laboratories (NYSE:
ABT) is a highly reputed
medical device specialist company that has soundly outperformed the
market over the past few decades and has a strong track record of
delivering solid returns.
As the healthcare sector in the
U.S. is fairly saturated, the company faces lesser threats, making
it a top stock to buy in the dip. Abbot stock has almost tripled in
market value in the last five years and has returned over 500% to
investors since October 2011.
But it’s also down 10% from
all-time highs and seems oversold right now. Moreover, the
healthcare stock is reasonably valued and is trading at 26 times
its forward earnings. Abbot is forecast to grow its revenue by 15%
year over year to $39.85 billion while earnings are forecast to
rise by 21.6% year over year in 2021. Its bottom-line is in fact
expected to increase at an annual rate of 13% in the next five
years.
Wall Street expects ABT stock to
gain over 10% in the next 12-months. After accounting for its
dividend yield of 1.55%, total returns will be closer to
12%.
Adobe (NASDAQ:ADBE)
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