Banking

14 Top Stocks Are Now Totally On Sale, Including Tesla

There’s nothing like a good freak-out moment in the S&P 500 to give investors another shot at owning leading stocks. And that’s been the case with the latest Covid-19 scare.




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Now 14 top stocks in the S&P 500 up 50% this year so far — including Tesla (TSLA), a slew of energy stocks like APA (APA), health care play DexCom (DXCM) and industrial Generac Holdings (GNRC) — are all down 11% or more from their highs. Those drops are roughly four times more severe than the S&P 500’s fall from its high, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.

So the market is now offering an opportunity to grab leaders that were extended not long ago. And that’s key as the market’s mood is shifting away from fear and back to opportunity.

“It didn’t take long for investors to go back to the buy-the-dip playbook,” said Edward Moya, strategist at Oanda. “U.S. stocks are only a few percentage points away from record highs on optimism the latest Covid variant won’t completely upend economic activity.”

Looking For Discounts With S&P 500 Leaders

Investors are now looking through the S&P 500’s wreckage to find second chances for top stocks. Some concerns appear to be fading for now.

The S&P 500 is still down 2.7% from early November amid worries about inflation, the Federal Reserve’s tapering of financial support and a new variant of Covid-19. As such, stocks’ value plunged more than $2 trillion from the market’s high, says Wilshire Associates.

But now, many investors are seeing opportunity. The bull market is still in place, with investors up more than $7 trillion on the year.

Another Shot At Big-Time S&P 500 Winners

Two giant winning stocks this year are presenting investors with new opportunities: Tesla and vaccine player Moderna (MRNA).

Tesla shares are down a substantial 12.8% from their 52-week high of 1,243.49 notched on Nov. 4, 2021. Amazingly, even after that drop Tesla is still a leading stock, up more than 53% this year to Thursday’s close of 1,084.60. Much hinges on the critical fourth-quarter, to be reported on Jan. 26, 2022.

For the full year, analysts think Tesla’s earnings per share will jump more than 170%. But Tesla might need to do better than that. Even with the stock down more than 10%, it’s still more than 25% past analysts’ 12-month price target of 857. Should you buy Tesla stock now?

What about Moderna? It’s been a champion stock all year, soaring more than 188% to 301.49. But it’s down a bruising 39% from its 52-week high of 497.49 notched on Aug. 10. But it, too, is still ahead of analysts’ 12-month price targets by nearly 10%. All eyes are on the company making $26.41 a share in 2021 and putting up bottom-line growth of 3% in 2022. Should you buy Moderna stock now?

Deals In S&P 500 Energy And Other Top Firms

Energy firms have been solid performers all year. And the new Covid scare put many on sale.

APA, a Houston-based energy refiner, saw its shares tank nearly 16% from their 52-week high on Nov. 8, the same day the market peaked. And yet, it’s still up more than 84% for the year.

Meanwhile, a number of other expertly run leaders are finding their shares discounted. Shares of generator maker Generac have dominated all year; the stock is still up more than 78% in 2021. But anyone left behind the rally can now buy the shares for 22% below their 52-week high of 524.31 set on Nov. 2.

Similarly, glucose monitoring firm DexCom, known for its superb management, is trading for 15% below what investors were willing to pay just a few weeks ago on Nov. 18. Shares, though, are still up more than 50% this year.

So do bad things happen to good stocks? Sometimes. And investors may not waste time taking advantage of the situation.

Top S&P 500 Stocks Put On Sale

Stocks up 50% or more this year, but now down 11% or more from their highs

Company Ticker YTD stock change % change from high Date of 52-week high Sector
Moderna (MRNA) 188.6% -39.4% Aug. 10 Health Care
Generac Holdings (GNRC) 78.7 -22.5 Nov. 2 Industrials
Mosaic (MOS) 50.5 -19.9 Oct. 20 Materials
Occidental Petroleum (OXY) 71.3 -17.1 Oct. 26 Energy
Nucor (NUE) 102.2 -16.5 Aug. 13 Materials
APA (APA) 84.5 -15.9 Nov. 8 Energy
DexCom (DXCM) 51.5 -15.0 Nov. 18 Health Care
Gartner (IT) 98.8 -13.7 Nov. 2 Information Technology
CF Industries (CF) 53.2 -12.9 Nov. 18 Materials
Tesla (TSLA) 53.7 -12.8 Nov. 4 Consumer Discretionary
Fortinet (FTNT) 110.8 -11.9 Nov. 8 Information Technology
EOG Resources (EOG) 73.6 -11.9 Nov. 8 Energy
Marathon Oil (MRO) 133.6 -11.4 Nov. 8 Energy
Simon Property Group (SPG) 78.1 -11.3 Nov. 18 Real Estate
S&P 500  21.9 -2.7
Sources: IBD, S&P Global Market Intelligence

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Follow Matt Krantz on Twitter @mattkrantz


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