Buy These 3 Bear Market Bargain Stocks A stock is considered to enter bear market territory when it falls 20% or more from recent highs. There are plenty of stocks that fit this description in 2022, as...
By Sean Sechler
This story originally appeared on MarketBeat
Bearish Action Can Present Some of the Best Long-Term Buying Opportunities
With bears growling in a big way to start the year in equity markets, the savviest investors are putting together shopping lists of great companies to consider buying at bargain prices. While it's never easy to put capital to work in a market environment where volatility is commonplace, the truth is that downside in the market can provide the most appealing buying opportunities. Many of the biggest winners from years past are down big from their all-time highs, yet still have appealing long-term growth prospects and innovative business models that make them worth a look.
A stock is considered to enter bear market territory when it falls 20% or more from recent highs. There are plenty of stocks that fit this description in 2022, as many of the most popular growth names have been getting hit for months while the indices traded around all-time highs. While it's tough to say just when the overall market will find a bottom, one thing is for sure – there are plenty of good deals to be had at this time.
If you're interested in 3 stocks that could be bargains at their current bear market price levels, keep reading below.
NVIDIA (NASDAQ: NVDA)
First up is one of the biggest tech winners from 2021, semiconductor powerhouse NVIDIA. The stock is down roughly 30% from its all-time highs, reflecting just how cold sentiment has gotten towards the tech sector in recent months. With that said, long-term investors that missed the sharp moves higher last year might be looking at a fantastic buying opportunity in the coming weeks for this innovative visual computing company. NVIDIA is a company that is well-positioned for massive growth over the next decade thanks to its revolutionary GPUs that are used in some of the most exciting end markets in tech.
The company's chips play a key role in high-end PCs, data centers, video games, mobile devices, and automotive applications, and NVIDIA is perhaps one of the best ways to gain exposure to exciting new technology like artificial intelligence and autonomous driving. Investors might have forgotten NVIDIA's impressive Q3 earnings report after so much bearish action in the stock, as the company grew its Q3 revenue by 50% to reach a record of $7.1 billion. While there's still some headline risk here to consider if the company's ARM acquisition falls through, this is certainly a tech stock worth considering for the long-term after such a sharp pullback.
Target Corp (NYSE: TGT)
Target shares are 17.5% off of their highs as of this writing, which isn't technically in bear market territory. However, the recent selling pressure should still be viewed as an intriguing buying opportunity in the second-biggest U.S. discount retailer. Target operates over 1,900 Target, SuperTarget, and CityTarget merchandise stores across the country and is exactly the type of business to thrive in an uncertain economy. While it's true that Target will face tough comparables this year, the company has been making some very interesting strategic moves that should reward long-term shareholders.
For example, a recent partnership with Ulta Beauty, heavy investment in e-commerce, and store remodels are all positive for investors to consider. Holiday retail sales should also help the company deliver strong Q4 sales results, which could be a strong catalyst for the stock when Target reports in March. The bottom line here is that when it comes to buying stocks that have fallen significantly from their highs, it helps to focus on quality companies with reliable business models such as Target
Netflix (NASDAQ: NFLX)
Netflix is a reminder of just how quickly the market can move these days, as the stock has fallen a remarkable 40% from its 52-week highs from back in November. Investors should never try to catch a falling knife, but starting a small position in a company that is the market leader in streaming entertainment after such a monumental selloff could end up paying off in a big way. The company just reported Q4 earnings that underwhelmed the street due to a slowdown in forecasted subscriber growth, but there were still some bright spots from the report worth noting.
Netflix reported Q4 revenue of $7.71 billion, up 16% year-over-year, and added 8.28 million global paid net subscribers during the quarter, both exceeding the consensus estimates. Netflix also stated that it will be free cash flow positive in 2022, which is another positive that might be getting overlooked. The stock is getting hammered following the report because of its forecasted guidance for subscriber growth in Q1 2022, which could be hinting at the fact that streaming video competitors are eating into the company's market share. With that said, Netflix recently increased its prices, has an internal recommendation software that will be tough for competitors to replicate, and has great opportunities in international markets to gain more users going forward.