In this article, we discuss the 5 stocks that analysts say you should buy on the dip. If you want to read about some more stocks that analysts say you should buy on the dip, go directly to Analysts Say You Should Buy These 10 Stocks on the Dip.
5. Charter Communications, Inc. (NASDAQ:CHTR)
Number of Hedge Fund Holders: 73
Decrease in Share Price Over Past Month: 4.23%
Charter Communications, Inc. (NASDAQ:CHTR) provides broadband and cable services. On May 12, the company announced that it had chosen Marcien Jenckes, the president of advertising at Comcast Cable, to lead a joint venture to create a new streaming platform with Comcast. The firm plans on offering a cable-based alternative to online streaming services like Roku, Netflix, and Disney+. Marcien Jenckes has previously overseen the Video and Internet segment of Comcast.
On May 3, Pivotal Research analyst Jeffrey Wlodarczak maintained a Buy rating on Charter Communications, Inc. (NASDAQ:CHTR) stock but lowered the price target to $585 from $750, noting the firm “controls the best data mouse trap in the vast majority of its footprint for the foreseeable future”.
At the end of the first quarter of 2022, 73 hedge funds in the database of Insider Monkey held stakes worth $8.5 billion in Charter Communications, Inc. (NASDAQ:CHTR), the same as in the preceding quarter worth $16.5 billion.
4. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 90
Decrease in Share Price Over Past Month: 6.42%
ServiceNow, Inc. (NYSE:NOW) provides enterprise cloud computing solutions. The company posted earnings for the first quarter of 2022 in late April, reporting earnings per share of $1.73, beating market expectations by $1.50. The revenue over the period was $1.72 billion, up more than 26% compared to the revenue over the same period last year and beating market expectations by $20 million. The subscription revenues for the firm registered 26% year-on-year growth during the period.
On May 25, Stifel analyst Brad Reback maintained a Buy rating on ServiceNow, Inc. (NYSE:NOW) stock and lowered the price target to $550 from $650, noting that the “expanding platform, growing pipeline, and large deal momentum” would drive over 20% revenue growth and significant margin expansion for the firm in the coming months.
At the end of the first quarter of 2022, 90 hedge funds in the database of Insider Monkey held stakes worth $7.4 billion in ServiceNow, Inc. (NYSE:NOW), the same as in the preceding quarter worth $8.4 billion.
In its Q3 2021 investor letter, Palm Capital, an asset management firm, highlighted a few stocks and ServiceNow, Inc. (NYSE:NOW) was one of them. Here is what the fund said:
“ServiceNow, Inc. (NYSE:NOW) shares were our final top contributor for 3Q on a strong beat and raise quarter. The company reported 31% subscription revenue growth, 30% subscription billings growth, and a 19% non-GAAP FCF margin for the quarter, while raising full year subscription revenue and billings guidance to 29% and 31%, respectively, as well as raising non-GAAP FCF margin by 100 basis points to 31%.
ServiceNow, Inc. (NYSE:NOW) is a best-of-breed provider of both IT Service Management (ITSM) and IT Operations Management (ITOM) solutions to enterprise customers. The company’s products serve mainly its clients’ internal employee base with a current focus on automating the process of IT deployment, configuration and service and management of IT assets across an organization. Both its ITSM and ITOM solutions are delivered as a software-as-a-service (SaaS), and are each leading solutions in growing markets, driven by the secular trend of enterprises transitioning all aspects of their business and operations to the cloud. As the company maintains and adds customers, upsells them, and expands into adjacent markets, we believe ServiceNow, Inc. (NYSE:NOW) should sustain a strong long-term revenue and FCF growth trajectory.”
3. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 159
Decrease in Share Price Over Past Month: 3.22%
Visa Inc. (NYSE:V) is a payments technology firm. On May 3, the company announced that it had extended an agreement with Paysafe to integrate Visa Direct on the platforms of the latter. Under the deal, Paysafe will offer Visa Direct to merchants, exchanges, operators, and other online businesses in the UK and Europe. The agreement allows access to a single point of connection to enable push payments to eligible Visa cards for domestic payouts, as well as to eligible Visa cards and accounts for cross-border payments.
On May 17, Goldman Sachs analyst Will Nance initiated coverage of Visa Inc. (NYSE:V) stock with a Buy rating and a price target of $282, identifying the firm as a “global leader” in the payments industry with an attractive leverage to long-term secular growth.
At the end of the first quarter of 2022, 159 hedge funds in the database of Insider Monkey held stakes worth $28 billion in Visa Inc. (NYSE:V), compared to 142 in the preceding quarter worth $29 billion.
In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Visa Inc. (NYSE:V) was one of them. Here is what the fund said:
“Shares of global payment network Visa Inc. (NYSE:V) were up 2.5% on strong quarterly results with 24% revenue growth and 27% EPS growth. Payment volume grew 20% with notable strength in cross-border volumes as travel activity rebounded from depressed levels. Management raised full-year guidance to reflect high-teens revenue growth. Shares also likely benefited from a “flight to safety” during a volatile quarter for equities. We continue to own the stock due to Visa’s long runway for growth underpinned by the continued migration from cash transactions to card/digital and strong competitive advantages, operating in a duopoly with Mastercard.”
2. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Decrease in Share Price Over Past Month: 14.39%
Alphabet Inc. (NASDAQ:GOOG) is a diversified technology company. On May 11, news publication Bloomberg reported that Google had joined other tech giants in bidding for rights to telecast the popular Indian Premier League, a domestic cricket tournament widely popular in commonwealth nations. Earlier in May, the company had announced that it was purchasing Raxium, a California-based startup focused on MicroLED technology. The purchase will help the tech giant with future augmented and mixed reality headsets.
On May 24, Jefferies analyst Brent Thill maintained a Buy rating on Alphabet Inc. (NASDAQ:GOOG) stock and lowered the price target to $3,100 from $3,400, noting that the microenvironment was likely to weigh on the whole ad industry in the short-term.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG), with 2.3 million shares worth more than $6.6 billion.
In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:
“We have modestly reduced the size of our position in Alphabet Inc. (NASDAQ:GOOG) (from 6.5% at the end of the first quarter of 2022 to 5.3% as of the end of the first quarter of 2022), after the stock rallied 64% in 2021 and continued outperforming during the first quarter, declining just 3%.”
1. Meta Platforms, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 200
Decrease in Share Price Over Past Month: 2.94%
Meta Platforms, Inc. (NASDAQ:FB) is a tech firm that owns and runs social media platforms. On May 20, the company announced that it was working on a plan to open WhatsApp, the popular messaging application, to businesses of any size. As part of the overhaul plan, the firm said it would also introduce a cloud-based application programming interface for the purpose. The firm claims that over a billion users already avail the business services offered by WhatsApp. Over two billion people around the world use the messaging application.
On May 24, Jefferies analyst Brent Thill maintained a Buy rating on Meta Platforms, Inc. (NASDAQ:FB) stock and lowered the price target to $310 from $330, noting that the revenue estimates for a number of digital ad firms were being lowered for the 2023 and 2024 fiscal year.
At the end of the first quarter of 2022, 200 hedge funds in the database of Insider Monkey held stakes worth $19.3 billion in Meta Platforms, Inc. (NASDAQ:FB), compared to 224 in the preceding quarter worth $31.8 billion.
In its Q1 2022 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:
“Meta Platforms, Inc. (NASDAQ:FB), the parent company of Facebook, reported excellent operating results in 2021. Its revenue increased 37%, operating earnings increased 40%, and the company generated $40 billion of free cash flow. Despite these excellent results, Meta experienced extreme volatility in its stock price during the first quarter. We believe that two factors are responsible for this volatility. First, the company quantified the headwind to revenue from Apple’s recent privacy changes in the amount of approximately $10 billion for 2022. Meta is rebuilding its advertising technology, and we believe the long-term headwinds from Apple’s privacy changes will be limited because Meta Platforms, Inc. (NASDAQ:FB) will create a suitable solution. Second, Meta continues to invest heavily into its Reality Labs segment, also known as the metaverse. While we believe the metaverse presents great opportunity for Meta Platforms, Inc. (NASDAQ:FB), we are not assigning any value to it in our valuation work. While 2022 may be challenging for Meta, the company’s competitive advantages are still intact, and the company trades at a significant discount to our estimate of its intrinsic value. Despite our concerns about a possible recession, we expect Meta to return to double-digit bottom line growth next year.”
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