The overall stock market has hit quite a bit recently. However, many technical stocks have been worse off, as evidenced…
The overall stock market has hit quite a bit recently. However, many technical stocks have been worse off, as evidenced by the technically heavy Nasdaq Composite s decline of 9% since October 1, compared with the more evenly weighted S & P 500’s 6% recovery over the same period. While some technical stocks may have been calculated for a correction, the decline for two outstanding companies may have gone too far.
These layers are Square (NYSE: SQ) and Apple (NASDAQ: AAPL) which has fallen by 28% and 21
% since October 1 . For opportunistic investors this may be a good time to buy.
Shares in Financial Technology Company Square have been completely lost recently. With the 28% decrease since October 1, Square has lost almost a third of its value. The legitimate story about the stock extends beyond the wider market recovery in technical stocks. The company’s share also fell when news broke as Square CFO Sarah Friar said she planned to become CEO of Nextdoor (a social network for neighbors and communities) and when management gave a worse than expected outlook for fourth quarter results.
Although the warehouses of the square have declined recently, the business has become flourishing. In fact, the company just published is the sixth consecutive quarter of a faster sales increase. In Q3, Q3 increased by 51% the previous year – an increase from 48% in the second quarter. Adjusted earnings before interest, taxes and depreciation jumped 107 percent the previous year to $ 71 million.
For long-term investors, this may be a good time to retrieve some shares in this fast-growing company.
Apple’s warehouse has similarly been plagued recently by more than one technology sales. Many reports of worse than expected demand for the company’s latest iPhones have refused it because investors wonder if the main business segment can continue to grow.
Apple’s last quarter grew iPhone revenue by 29% the year before. But the quarter primarily represents the last full quarter of the iPhone X and iPhone 8 cycle; iPhone XS was not released until the last weeks of the quarter. Investors are worried that the latest iPhones will not be able to live up to tough comparisons a year ago. And Apple’s guidance for total revenue rising only 1% to 5% shows that management also expects company growth to slow.
But the decline of the stock has priced in these problems. Shares deal with a P / E of just 15. While a further decline is always possible, investors who buy at this level will probably not regret it a few years from now.
Daniel Sparks owns shares in Apple and Square. Motley Fool owns and recommends Apple and Square. The Motley Fool has the following options: long January 2020 $ 150 call on Apple, short January 2020 $ 155 appeals to Apple, and short January 2019 $ 80 call on Square. Motley Fool has a policy of disclosure.