Most investors know the market’s down quite a bit from February’s high. Not all investors realize that a handful of compelling stocks were already sliding before the marketwide correction started, and that several of these same names haven’t yet even hinted at a recovery. Wall Street’s seemingly given up on them, looking right past everything that makes these companies — and their stocks — so promising.
Not me, though. If you’ve got some cash you’re looking to put to work at a bargain price, here’s a closer look at three great growth stocks that are being wrongly overlooked by most other investors.
If you’re struggling to figure out why PepsiCo (NASDAQ: PEP) shares are now down 25% from their May 2023 peak (and still priced within sight of January’s four-year low), you’re not alone. Inflation is clearly crimping sales growth and profits, and concerns about the rise of anti-obesity drugs aren’t exactly unmerited.
As the saying goes, the punishment doesn’t fit the crime. Investors have priced in far more bad news than actually exists while ignoring all the reasons to own a piece of this beverage giant.
The dividend is the chief bullish argument here, and understandably so. Newcomers will not only be stepping into PepsiCo shares while its forward-looking dividend yield stands at 3.7%, but plugging into a stock that’s now raised its dividend payment every year for the past 53 years. That streak isn’t likely to end anytime soon.
There’s a bigger, more philosophical reason to own a stake in this beverage company, which also happens to own snack-chip company Frito-Lay (Lay’s chips, Cheetos, Doritos, and more). That’s the way it’s structured.
Unlike archrival Coca-Cola — which outsources the vast majority of its product production to third-party bottlers — PepsiCo owns the bulk of its own production facilities. This leads to thinner profit margins, since bottling and snack food production are relatively expensive. But this structure also provides PepsiCo with more control of its business. Coca-Cola simply can’t replicate that with third-party production partners that have their own profit and operational agendas.
So far, this nuanced difference hasn’t mattered much to investors. While PepsiCo’s stock is near a multi-year low, Coca-Cola’s stock is within reach of last year’s record high.
Have faith that the market will eventually figure everything out. In the meantime, use this ticker’s weakness to your advantage.
With a $1.2 billion market cap, Iovance Biotherapeutics (NASDAQ: IOVA) doesn’t turn many heads. It’s just not big enough to grab much of the financial media’s or most investors’ attention. As the old adage reminds us, however, good things come in small packages.
