In this article, we will take a look at the 5 Quality Stocks to Buy with Shares Down Over 30% YTD. To read our analysis of the iShares MSCI USA Quality Factor ETF, its performance, and weighting of the components as well as the risk/reward and methodology of this list, you can go to the 10 Quality Stocks to Buy with Shares Down Over 30% YTD.
5. NVIDIA Corporation (NASDAQ:NVDA)
Percentage of iShares MSCI USA Quality Factor ETF Holdings: 2.53%
Year to Date Performance as of September 22: -57.29%
Number of Hedge Fund Holders: 84
Founded in 1993, California-based NVIDIA Corporation (NASDAQ:NVDA) is a leading technology company focused on the design and manufacturing of accelerated computing hardware and software products. Its core businesses comprise of Gaming, Data Center, Professional Visualization, and Automotive, with Gaming and Data Center making up for more than 80% of its revenues. Its GeForce GPU is used by more than 200 million gamers and creators, making it the market leader with 80% market share in PC Gaming.
After rallying substantially over the last five years, shares of NVIDIA Corporation (NASDAQ:NVDA) are down more than 57% year to date as of September 22 due to the lower NASDAQ.
Earlier in September, Needham analyst Rajvindra Gill lowered the firm’s price target on Nvidia Corporation (NASDAQ:NVDA) shares to $170 from $185 while maintaining a ‘Buy’ rating on the shares. Despite the lowering of price target, the analyst is positive about NVIDIA’s shares for “their attractive valuation, superior balance sheet, and robust data center buildouts”.
NVIDIA Corporation (NASDAQ:NVDA) is subject to bullish sentiment from a large number of hedge funds as 84 of the 895 hedge funds held its shares as of Q2 2022, with the total hedge fund holdings valued at $3.3 billion. Its largest shareholder is Citadel Investment Group.
4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Percentage of iShares MSCI USA Quality Factor ETF Holdings: 0.86%
Year to Date Performance as of September 22: -51.70%
Number of Hedge Fund Holders: 87
Based in Santa Clara, California, Advanced Micro Devices, Inc. (NASDAQ:AMD) is a leading semiconductor company using high-performance computing, graphics, and visualization technologies to provide computing solutions for cloud, edge, and end devices. On September 20, the semiconductor maker unveiled its latest Ryzen™ 7020 Series and Athlon™ 7020 Series Processor lineup, promising high-end performance and longer battery life for mobile and laptop devices.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is down almost 52% year to date as of September 22 due to profit taking and weaker semiconductor shares.
In August, Advanced Micro Devices, Inc. (NASDAQ:AMD) released its financial results for the quarter ended June 25, 2022. Its revenues increased by 70% y-o-y to $6.6 billion, while net income declined by 37% y-o-y to $447 million, for the three months. The normalized EPS was recorded at $1.05 per share, beating the consensus by $0.01.
On September 15, Mizuho analyst Vijay Rakesh lowered the price target on Advanced Micro Devices, Inc. (NASDAQ:AMD) shares to $125 from $140 but maintained a ‘Buy’ rating on the shares.
As of Q2 2022, 87 hedge funds tracked by Insider Monkey held shares of Advanced Micro Devices, Inc. (NASDAQ:AMD), worth $4.8 billion. Ken Fisher’s Fisher Asset Management is its largest hedge fund shareholder with ownership of 25.1 million shares valued at $1.9 billion.
3. Adobe Inc. (NASDAQ:ADBE)
Percentage of iShares MSCI USA Quality Factor ETF Holdings: 1.21%
Year to Date Performance as of September 22: -49.38%
Number of Hedge Fund Holders: 92
Adobe Inc. (NASDAQ:ADBE) is a leading digital media and digital marketing solutions company based in California. Its software and cloud solutions are packaged into three cloud solutions: Adobe Creative Cloud – comprising Photoshop, Lightroom, Illustrator, Premier Pro, and others; Adobe Document Cloud – comprising solutions for creating, editing, sharing, scanning, and signing digital documents; and Adobe Experience Cloud – solutions for customer journey management, data analytics, content personalization, commerce, and marketing workflows
On September 15, Adobe Inc. (NASDAQ:ADBE) announced that it had entered into an agreement to acquire Figma, a collaborative design platform, for $20 billion comprising half cash and half stock compensation. Even though the acquisition makes business sense, the price tag and timing has raised concerns for investors and analysts, which has resulted in a significant drop in its share price.
As of September 22, shares of Adobe Inc. (NASDAQ:ADBE) have fallen by almost 50% due to the weaker NASDAQ.
As of Q2 2022, a significant number of hedge funds exhibited a bullish sentiment for Adobe Inc. (NASDAQ:ADBE) shares as 92 out of 895 hedge funds tracked by Insider Monkey held its shares with a total value of $7.5 billion. Its largest shareholder was Fisher Asset Management with ownership of nearly 6.2 million shares valued at $2.3 billion.
2. Alphabet Inc. (NASDAQ:GOOG)
Percentage of iShares MSCI USA Quality Factor ETF Holdings: 1.75%
Year to Date Performance as of September 22: -30.49%
Number of Hedge Fund Holders: 153
Alphabet Inc. (NASDAQ:GOOG), based in Mountain View, California, is the parent company of several companies including the Google, Verily Life Sciences, GV (formerly Google Ventures), Calico, and X-the moonshot factory. Majority of its revenue is generated by Google Services which comprises of ads, Android, Chrome, hardware, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube.
Although it is a blue chip stock, shares of Alphabet Inc. (NASDAQ:GOOG) are down over 30% as of September 22 due to the weaker market.
Alphabet Inc. (NASDAQ:GOOG) released the financial results for Q2 2022 earlier this year in July. Its revenue increased by 13% y-o-y to $69.7 billion, while its net income decreased by 16% y-o-y to $16 billion, for three months ended June 30, 2022. It reported a normalized EPS of $1.21, missing the consensus by $0.08.
Alphabet Inc. (NASDAQ:GOOG) is one of the most commonly owned stock among the 895 hedge funds tracked by Insider Monkey. As of Q2 2022, 153 hedge funds owned shares of Alphabet Inc. (NASDAQ:GOOG), valued at $22.3 billion.
1. Meta Platforms, Inc. (NASDAQ:META)
Percentage of iShares MSCI USA Quality Factor ETF Holdings: 3.11%
Year to Date Performance as of September 22: -57.54%
Number of Hedge Fund Holders: 184
Menlo Park, California-based Meta Platforms, Inc. (NASDAQ:META) is a technology conglomerate focused on building products and services that help people connect and communicate. Formerly known as Facebook, Inc., the tech conglomerate reports its business under two segments: Family of Apps – comprising social media web and smartphone apps Facebook, Instagram, Messenger, and WhatsApp; and Reality Labs – comprising augmented and virtual reality products including hardware, software, and content.
Meta Platforms, Inc. (NASDAQ:META) mainly generates revenue through advertising services on its platforms which boast a combined total of 3.65 billion monthly active users as of June 30, 2022.
Due to competition from TikTok, Meta Platforms, Inc. (NASDAQ:META) shares are down over 57% year to date as of September 22.
In August, Morgan Stanley analyst reduced the price target on Meta Platforms, Inc. (NASDAQ:META) shares from $280 to $225, while Loop Capital lowered the price target from $180 to $165.
Meta Platforms, Inc. (NASDAQ:META) is among hedge funds’ favorites as 184 of the 895 hedge funds tracked by Insider Monkey hold its shares valued at a combined total of $18.2 billion.
Here is what Alger Capital specifically said about Meta Platforms, Inc. (NASDAQ:META):
“Meta Platforms, Inc. (NASDAQ:META) operates Facebook, the world’s largest social network. The digital advertising industry is taking market share of advertising dollars from print, radio, and tv media. However, concerns about brand risk, or having advertisements appear alongside of controversial content, caused brands and agencies to move budgets away from meta, resulting in disappointing revenue. Diminished ad tracking capability relative to consumer opt-out also weighed upon sentiment for meta shares. Meta’s share performance responded favorably, however, to first quarter results that that while not strong fundamentally, were positive against extremely low expectations among some investors. The positive contribution to portfolio performance was due to a sequential quarterly increase in customer utilization and management lowering its expense guidance $3 billion in order to protect earnings. In a market environment that is rewarding companies with relatively high current earnings, we believe Meta’s spending discipline resonated with investors.”
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