The recent selloff has hit some stocks much harder than others.
The major indices are largely flat for the year, with the Dow Jones Industrial Average and Nasdaq down less than 2% and the S&P 500 index up slightly. But the story changes when you look closely at specific companies.
In fact I found three great companies of tomorrow that are on sale today.
Some high-flying stocks are significantly off of their 52-week highs. For companies with a grim future, this isn’t much of a surprise. But for great companies with a bright future ahead of them, those I consider to be “companies of tomorrow,” a major selloff represents a terrific buying opportunity.
With the deadline to contribute 2013 funds to an IRA quickly approaching, I’ve been eyeing some of today’s hottest stocks for good buying opportunities. I bought shares of each of the three companies below yesterday after the market opened. And even though they all rose in yesterday’s trading session, current levels still represent a buying opportunity for each of these great companies.
Here they are, three companies of tomorrow that are on sale today.
Amazon (NASDAQ: AMZN)
As the largest eCommerce platform in North America, Amazon has defined a new way to shop. Its ventures include its Amazon.com marketplace, audiobooks, grocery delivery, delivery-by-drone, order fulfillment services, streaming video and gaming content and many more. As these businesses develop and competition erodes, Amazon’s strategy will appear even more successful than it already does.
With a 52-week high of over $400, Amazon shares trade at a deep discount. Even after rising almost 3% yesterday, shares are still roughly 20% below the 52-week high.
LinkedIn (NYSE: LNKD)
With almost 300 million users and valuable career data on all of them, LinkedIn has a bright future ahead of it. I consider this a company of tomorrow because it offers basic services and conveniences to businesses that will make LinkedIn a lot of money while simultaneously saving these businesses money.
For example, companies can spend a lot less searching for job applicants when paid postings on LinkedIn use targeted searches to bring them qualified candidates.
Despite rising almost 6% yesterday, shares of LinkedIn are still trading 34% below its 52-week high. I consider that a deep discount.
Tesla (NASDAQ: TSLA)
It is becoming clear that Tesla is more than just a car company. Sure, Tesla is making eco-friendly cars better than has ever been done. In fact, Consumer Reports rated the Tesla Model S the best car it had ever driven.
But Tesla appears to be setting its sights on how we power our lives. With its planned lithium battery gigafactory, Tesla could soon redefine the way that we charge up and power our methods of transportation, communication and entertainment.
Even still, with its industry-disrupting model of selling directly to consumers and bypassing the dealership model, Tesla has become a hugely successful company in just a few short years. Though Tesla shares rose almost 4% yesterday, the stock is still around 19% below its 52-week high of $265.
The Bottom Line
I sure love a good sale. I love it even more when the merchandise is of high quality.
When top-notch companies pull back from their 52-week highs for no good reason besides share prices or the markets getting a bit overheated, a buying opportunity has presented itself.
There are many great stocks on the sale rack right now besides the three above. Which of your favorite companies is on sale right now?
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