The stock market has finally encountered some selling pressure after months of relentless advances.
Pullbacks in strong markets are often buying opportunities. It's a good time to check the updated POWR Ratings.
Our POWR Ratings are updated every single day to provide investors with the information they need to evaluate the merits (or lack thereof) of stocks in myriad industries. These ratings are shaped by a wide array of quantitative and qualitative data.
There could be an opportunity to buy the dip on stocks that have recently been upgraded.
The following four stocks were recently upgraded to a rating of Strong Buy: Analog Devices (ADI), Best Buy (BBY), Align Technology (ALGN), and BIlibili (BILI).
Analog Devices (ADI)
Integrated circuits used in consumer electronics and industrial applications will prove increasingly important as we transition into a tech-dominated future. ADI makes and markets these devices. Examples of ADI products include amplifiers, converters, encoders, decoders, analog microcontrollers, and temperature sensors.
ADI has A grades in each POWR Rating but for its Peer Grade of B. Just as important is ADI's top-10 ranking out of nearly 90 stocks in the Semiconductor & Wireless Chip category. ADI price returns are primarily in the green but for '18 when the stock had a -1.64% price return. ADI's '19 price return was 41.31%. ADI has an average analyst price target of $137.13, indicating there is at least a 13% upside.
ADI has a reasonable forward P/E ratio of 24 for a tech stock, meaning it might be underpriced at its current trading level. Look for ADI to escalate toward its 52-week high of $127.39 in the months ahead.
Best Buy Co. (BBY)
BBY is a favorite amongst tech geeks and everyday people alike as it provides a massive, warehouse-like setting with myriad electronics at reasonable prices. Though BBY stores had limited operations in recent months due to the pandemic, business is finally getting back to normal.
The POWR Ratings show BBY has A grades in each POWR Component but for its Industry Rank grade of B. BBY is ranked above every other Specialty Retailers stock. Furthermore, BBY price returns are mainly in the green but for the lone exception of '18. BBY's one-year price return is 83.80%. The stock's three-year price return is 124.61%.
The analysts insist BBY will reach $122.17 per share. If this price is hit, BBY will have spiked nearly 9%. However, BBY has soared toward $120 after dipping down to $50 when the market sold off.
If BBY pulls back in the weeks ahead, it will present the perfect opportunity to establish a position in this electronics stalwart.
Align Technology (ALGN)
Dentists and patients alike are quick to testify to the merits of Invisalign. Invisalign straightens crooked and gapped teeth with seemingly futuristic dental technology. Invisalign works faster and looks better than traditional dental braces. Though Invisalign is fairly costly, it is worth every penny as it works to perfection.
ALGN has A grades in each POWR Rating Component but for its Peer Grade of B. ALGN is ranked in the top five of nearly 140 Medical - Devices & Equipment stocks. Furthermore, ALGN has impressive price returns in the green but for the lone exception of '18. ALGN's three-month price return is 20%, its six-month price return is 39% and its five-year price return is an impressive 477%.
Look for ALGN to test its 52-week high of $326.36 as the economy rebounds and more people are willing to pay for ALGN’s Invisalign translucent aligners.
Bilibili Inc. (BILI)
Online entertainment is on pace to supplant conventional TV entertainment in due time. BILI provides a web-based entertainment platform in China. BILI offers everything from mobile games to web-based videos, live broadcasts, and more.
The POWR Ratings reveal BILI has A grades in each POWR Component category but for its Industry Rank of B. BILI is ranked in the top 10 of 100+ China stocks. BILI will undoubtedly benefit in quarters to come as a result of the lockdown across China. The majority of BILI users are millennials and members of Generation Z, meaning they are interested in web-based entertainment.
BILI's most recent quarterly revenue spiked 60%. The company's adjusted earnings tripled in the quarter. Add in the fact that BILI's user base increased 70% across the past year alone and you have even more reason to buy this stock.
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BBY shares were trading at $106.12 per share on Friday morning, down $2.58 (-2.37%). Year-to-date, BBY has gained 22.81%, versus a 6.02% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
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