Three of the Most Oversold Stocks to Own

02:13 10/17/2018

After a ridiculous pullback in the markets, we’re finding a considerable number of bargains you may not want to overlook. Here are our top three.

Cree Inc. CREE 

In recent weeks, Cree plummeted from $52 to less than $34 on uneventful fourth quarter results in August 2018, as well as weakness in the semiconductor space. However, it appears the pullback was a severe overreaction, which led JP Morgan to upgrade the stock from Underweight to Neutral with a $35 price target. And it appears JP Morgan was spot on with its upgrade. Earlier today, the stock jumped more than $2 a share on earnings.

In its first quarter, CREE posted a net loss of $11.1 million, or 11 cents a share, which was slightly above analyst expectations for a loss of $11 million. On an adjusted basis, it had EPS of 22 cents a share, which was far better than the 12 cents expected. Going forward, the company anticipates Q2 revenue in a range of $398 million to $418 million.

DocuSign DOCU 

After pulling back with the tech-heavy NASDAQ, DOCU is a bargain stock. While it’s not cheap, its current valuation is reasonable for a fast-growing firm (billings grew 32% last quarter) with a leading position in the market. In its last quarter, revenue was up 33% year over year. The company also raised its revenue outlook for the year, expecting $683 million to $688 million. That’s up nicely from a previous revenue forecast of $652 million to $658 million.

Cypress Semiconductor CY 

Semiconductor stocks have been beaten up severely in recent weeks. But the fear in our opinion is greatly overdone. In fact, many could now begin to bounce back big. In early October 2018, Deutsche Bank reduced its 2019 earnings estimates for a number of chipmakers, citing growing weakness in business activity. This raised panic among investors, leading to pullbacks. However, the sector’s fundamentals are still strong, with global semiconductor sales increasing once again.

One of the stocks that could bounce back significantly is CY. Technically, it’s the most oversold it’s been in quite some time. The last time it was this oversold was September 2017 right before it rallied from $13 to $18.50.

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
Most Read