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Although Wall Street has evolved significantly over the past few years, several traditional investing philosophies have prevailed. Out of these, perhaps none have witnessed the level of fanaticism that is felt by the infamous “Buy the dips” strategy.
The “Buy the dips” strategy is exactly what it sounds like: following a significant drop in the price of a stock, bullish investors will scoop up shares at what they believe is a discount. The philosophy works because short-term price volatility is oftentimes not indicative of the long-term health of a company, especially in an overall bull market.
What’s more, investors can apply the “Buy the dips” philosophy when using the Zacks Rank because the Zacks Rank is entirely unaffected by recent price action. While the Momentum category of our Style Score system does grade stocks based on their latest movement, the Zacks Rank emphasizes earnings estimates and earnings estimate revisions to find stocks that are likely to outperform the market over the next one-to-three months.
With that said, we’ve identified several stocks that investors should consider buying on the dip right now. All of these stocks have slumped a bit over the past four weeks, but their fortunes could be poised to change soon, as they are all currently sporting a Zacks Rank #2 (Buy) or better ranking. Check them out now:
Chemours is a chemical conglomerate with a variety of notable brands, including Teflon and T-Pure, in its portfolio. Shares of the company have dipped over 11% in the past four weeks, but its latest earnings report could be a sign of good things to come. Earlier this month, Chemours reported better-than-expected earnings, and in response, analysts have been revising their estimates for its upcoming fiscal year.
Our consensus estimate for the company’s fiscal 2018 has now gained 13 cents within the last 30 days. Also, the stock’s P/E ratio of 13.58 and P/S ratio of 1.58 lend more evidence to the idea that its shares are undervalued right now. On top this, CC is currently sporting a Zacks Rank #2 (Buy).
Ichor Holdings is a producer of critical fluid delivery subsystems for semiconductor capital equipment. Over the past four weeks, the stock has dipped about 17%. Still, estimates have been on the rise. In fact, our consensus estimate for the company’s upcoming fiscal year has improved by 53 cents over the last 30 days, and we now expect to ICHR to report EPS growth of 38% and sales growth of 30% next year.
This positive estimate revision has helped ICHR earn a Zacks Rank #2 (Buy). And with a P/E ratio of 11.09 and a P/S ratio of 1.16, this stock is also signaling that it is undervalued right now. Furthermore, the company is generating about $1.67 in cash per share and growing its cash flow at a 30% clip right now, so its financial stability is in no doubt.
3. Nutrisystem, Inc.
Nutrisystem is a leader in the weight loss industry, having helped millions of people lose weight through its proprietary dieting methods. Shares are still up over 40% year-to-date, but the stock has slumped about 18% off its all-time highs over the past four weeks. Still, the company is an interesting growth pick, and rising earnings estimates imply a quick rebound.
Our consensus estimate for the company’s upcoming fiscal year has gained four cents over the past 30 days. We now expect Nutrisystem to post EPS growth of 18% and sales growth of 15% in 2018. The stock is also sporting a “B” grade for Value in our Style Scores system. NTRI is currently a Zacks Rank #2 (Buy).
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
3 Stocks To Buy On The Dip Right Now
Although Wall Street has evolved significantly over the past few years, several traditional investing philosophies have prevailed. Out of these, perhaps none have witnessed the level of fanaticism that is felt by the infamous “Buy the dips” strategy.
The “Buy the dips” strategy is exactly what it sounds like: following a significant drop in the price of a stock, bullish investors will scoop up shares at what they believe is a discount. The philosophy works because short-term price volatility is oftentimes not indicative of the long-term health of a company, especially in an overall bull market.
What’s more, investors can apply the “Buy the dips” philosophy when using the Zacks Rank because the Zacks Rank is entirely unaffected by recent price action. While the Momentum category of our Style Score system does grade stocks based on their latest movement, the Zacks Rank emphasizes earnings estimates and earnings estimate revisions to find stocks that are likely to outperform the market over the next one-to-three months.
With that said, we’ve identified several stocks that investors should consider buying on the dip right now. All of these stocks have slumped a bit over the past four weeks, but their fortunes could be poised to change soon, as they are all currently sporting a Zacks Rank #2 (Buy) or better ranking. Check them out now:
1. Chemours Company (CC - Free Report)
Chemours is a chemical conglomerate with a variety of notable brands, including Teflon and T-Pure, in its portfolio. Shares of the company have dipped over 11% in the past four weeks, but its latest earnings report could be a sign of good things to come. Earlier this month, Chemours reported better-than-expected earnings, and in response, analysts have been revising their estimates for its upcoming fiscal year.
Our consensus estimate for the company’s fiscal 2018 has now gained 13 cents within the last 30 days. Also, the stock’s P/E ratio of 13.58 and P/S ratio of 1.58 lend more evidence to the idea that its shares are undervalued right now. On top this, CC is currently sporting a Zacks Rank #2 (Buy).
2. Ichor Holdings, Ltd. (ICHR - Free Report)
Ichor Holdings is a producer of critical fluid delivery subsystems for semiconductor capital equipment. Over the past four weeks, the stock has dipped about 17%. Still, estimates have been on the rise. In fact, our consensus estimate for the company’s upcoming fiscal year has improved by 53 cents over the last 30 days, and we now expect to ICHR to report EPS growth of 38% and sales growth of 30% next year.
This positive estimate revision has helped ICHR earn a Zacks Rank #2 (Buy). And with a P/E ratio of 11.09 and a P/S ratio of 1.16, this stock is also signaling that it is undervalued right now. Furthermore, the company is generating about $1.67 in cash per share and growing its cash flow at a 30% clip right now, so its financial stability is in no doubt.
3. Nutrisystem, Inc.
Nutrisystem is a leader in the weight loss industry, having helped millions of people lose weight through its proprietary dieting methods. Shares are still up over 40% year-to-date, but the stock has slumped about 18% off its all-time highs over the past four weeks. Still, the company is an interesting growth pick, and rising earnings estimates imply a quick rebound.
Our consensus estimate for the company’s upcoming fiscal year has gained four cents over the past 30 days. We now expect Nutrisystem to post EPS growth of 18% and sales growth of 15% in 2018. The stock is also sporting a “B” grade for Value in our Style Scores system. NTRI is currently a Zacks Rank #2 (Buy).
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>