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Buy This Stock, Instead of That One

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  • (0:30) - Finding Alternative Stock Investments To Troubled Companies
  • (4:45) - Stocks To Keep On Your Radar
  • (25:00) - Episode Roundup: DIS, SONY, APPL, GOOGL, TSLA, RACE            


Welcome to Episode #338 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week, Tracey is going solo to discuss rejecting companies that may be struggling, or expensive, for those in the same industry that may not have the same problems.

It’s kind of like the stock version of buy this, but not that.

Widen your lens when considering what companies to invest in. You might be surprised at some hidden gems and better buying opportunities.

Buy This Stock, Not That One

1.       The Walt Disney Co. (DIS - Free Report) and Sony (SONY - Free Report)

Disney is in the headlines in 2022 thanks to the change in CEO back to Bob Iger, who led the company for over a decade.

Shares of Disney have plunged 39% year-to-date but aren’t cheap, with a forward P/E of 23. Disney’s Fiscal 2023 earnings estimates have been cut in the last 90 days, pushing the Zacks Consensus down to $4.20 from $6.50.

What about investing in Sony instead? Sony also has a big entertainment business with music, movies and gaming. Instead of participating in the streaming wars, Sony smartly decided to sell its movie content to others.

Shares of Sony are also down big in 2022, falling 36%. It’s cheaper than Disney, however, with a forward P/E of 14.9.

Should investors be taking a second look at Sony?

2.       Apple (AAPL - Free Report) and Alphabet (GOOGL - Free Report)

Apple is one of the most popular stocks on the market, with it even being the largest holding in Berkshire Hathaway’s equity portfolio.

But even with Apple shares down 16% year-to-date, it’s still not cheap, with a forward P/E of 23.7.

Earnings of Apple are expected to be up just 2.5% this fiscal year and only 8% next year. Analysts were also cutting Apple estimates over the last 60 days.

But maybe Alphabet is a better bet if you’re looking to buy a hardware and content platform company? Alphabet owns powerhouse YouTube, which is making a big push into Apple’s key podcast category. It’s also a big player in music.

Alphabet shares have fallen 33.6% year-to-date and are slightly cheaper than Apple, with a forward P/E of 20.4.

However, Alphabet is a Zacks Rank #4 (Sell), whereas Apple is a #3 (Hold).

Is Alphabet a cheaper alternative to Apple in 2022?

3.       Tesla, Inc. (TSLA - Free Report)

Tesla has fans both in cars and technology but year-to-date, Tesla shares are down 52%.

Could this be a buying opportunity? Tesla shares are still pricey, with a forward P/E of 41.4. However, Tesla earnings are expected to be up 79% in 2022 and another 30.5% in 2023. Few companies have such a bullish outlook in the face of a China slowdown and a possible global recession.

Is there an alternative to Tesla in either cars or in its technology for those who want a value?

What Else Do You Need to Know About Buying This Stock Instead of That One?   

Listen to this week’s podcast to find out.

[In full disclosure, Tracey owns shares of GOOGL in her own personal portfolio.]


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