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5 Beaten-Down Growth Stocks to Play the Volatility

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September seems to be living up to its reputation of being the softest month of the year.

The usual spoilers are the holiday weekend and the new school season that typically has people offloading some shares to take care of expenses.

This year, there was the huge V-shaped recovery that seems to be encouraging people to take some gains. Investor optimism may not be unfounded, since this was a health-driven downturn. And underlying fundamentals remain strong, especially in tech, which has been the main driver of the rally.

Also, manufacturing remains in expansion mode going by the latest ISM data. Various segments of retail are coming around. And according to the latest BLS data, the unemployment rate has now dropped for four straight quarters. True, it isn’t at pre-pandemic levels yet, but if the current rate of recovery is sustained, another 3-4 months should do it.

But it hasn’t been all good news. One thing that has helped to prop markets is the stimulus package, and it does appear that the government can’t come to a consensus about another round.

Also, while everyone was hoping for a vaccine before year-end, it now appears that this will be delayed, as most of the big drug companies aren’t confident about submitting their candidates for FDA approval yet. So this is likely to be a dampener on holiday spending.

And then of course we have the elections around the corner, so there’s bound to be additional turmoil.

And market weakness is just what we need to jump into growth stocks that have been too expensive to buy of late. So here are a few buy-ranked stocks with good growth prospects and attractive valuations-

Let’s take Celestica, Inc. (CLS - Free Report) for starters with its Zacks Rank #2 (Buy) and an A score for Growth, Value and Momentum - what’s not to like? Being one of the largest electronics manufacturing services (EMS) companies in the world, its long-term growth rate is sitting at 25.6%. And the best part, the stock is nearly 30% off its 52-week high, which has put its P/S multiple of 0.16X at just under the median value of 0.17X over the past year. That’s an undervalued stock!

Graphic Packaging Holding Company (GPK - Free Report) , which offers paperboard packaging solutions, is also a Zacks Rank #2 company with an A in both Value and Growth. Its long term growth rate is 25%. Having dropped 44% from its 52-week high, the stock is trading at a 0.60X P/S multiple, which is below the median value of 0.64X over the past year. Time to snap up!

Value retailer Ollies Bargain Outlet Holdings, Inc. (OLLI - Free Report) is another Zacks Rank #2 stock with both Growth and Momentum Scores at A and a long-term growth rate of 21.6%. The stock is 25% off its 52-week high, which gives it a P/S multiple of 3.44X, closer to the median value of 2.87X than the high of 4.38X. So it’s time to buy this stock.  

Hardwood floor provider Lumber Liquidators Holdings, Inc. (LL - Free Report) , with its Zacks Rank #2 (Buy), Growth Score B, Momentum Score A, and wielding a long-term growth rate of 27.5%, also looks good. The stock is 27% off its 52-week high, which gives it a P/S multiple of 0.59X. Being between its median and high values over the past year, this stock is worth picking up.   

Modular and portable storage provider WillScot Corp. (WSC - Free Report) has a Zacks Rank #2, Growth Score B and Momentum Score A. Its long-term growth rate is 27.8%. The stock is 20% off its 52-week high, so it’s understandable that it isn’t as cheap as LL and OLLI. B since its P/S multiple is between the median value and annual high, the stock is still attractive.

Wrapping Up

No matter where the market is at any given point, it’s important to remember that there will always be some people buying and some selling. And one person’s exit point is another’s entry. That’s just the way the whole thing works. Our goal is to seize the opportunities when they arise, so we can increase the value of our holdings over time.


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Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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