Buying stocks in the dip can be a great way to secure a lower price for an investment, especially if the underlying business is still strong. It can increase the chances that you will make a good profit from the stocks. However, you may need to act quickly; declines may not last long if the liquidation is not due to real company struggles.
While the S&P 500 increased by more than 2% last month, Teladoc Health (New York Stock Exchange: TDOC), Barrick Gold (NYSE: GOLD), Y Beyond the meat (NASDAQ: BYND) all crashed 16% or more. And despite those steep declines, these companies remain in good shape and their stocks could be solid long-term investments.
Teladoc is coming off a difficult month; its shares tumbled more than 16% in February. There was no obvious reason to divest the stock, as the company didn’t even release its latest earnings results until the end of the month. And when the earnings report was released on February 24, the numbers weren’t bad at all. For the period ended December 31, 2020, Teladoc’s fourth quarter revenue of $ 383.3 million increased 145% over the prior year period. And the number of telehealth visits exceeded 3 million, an increase of 139% year-on-year. Those numbers are projected to rise next quarter, with revenues that could hit $ 455 million and visits range from 2.9 million to 3.1 million.
The company is not yet profitable, but given the growth it is generating and the growing popularity of telehealth (even as vaccines surge across the country and the pandemic is under control), the healthcare stock still seems poised to get. more earnings in the future. Teladoc only completed its merger with Livongo Health on October 30, 2020, and the long-term gains from that partnership alone could make this an attractive investment to hold onto for many years. As Teladoc reaches more patients, Livongo focuses on chronic care and diabetes management, in particular, it could be scratching the surface in terms of its overall potential.
2. Barrick Gold
Barrick Gold is another example of a company doing well, but whose actions are not following suit. On February 18, the gold mining company released its fourth quarter results. Sales of $ 3.3 billion for the period ended December 31, 2020 grew 13.7% over the same period last year. The company benefited from a higher realized price per pound of gold ($ 1,871 vs. $ 1,483), which boosted its free cash flow from $ 429 million a year ago to $ 1.1 billion this last quarter.
The company has so much cash that it proposes to return some capital to shareholders, to the tune of $ 0.42 per share. That is in addition to his $ 0.09 quarterly dividend, which is currently yielding 1.6%. This is a business swimming in so much cash that you can actually afford to distribute such a large payout to your investors. Although the price of gold has been falling in recent months amid heightened optimism for the end of the pandemic now that multiple vaccines are available, it is still above $ 1,700 an ounce and higher than a year ago. And if there is a major collapse in the markets, it could skyrocket quickly.
Barrick is a solid investment for the long term and buying its shares can be a good way to protect yourself in case the markets turn a bit volatile. Like Teladoc, its shares also fell more than 16% last month.
3. Beyond the meat
The worst drop on this list of underperforming stocks belongs to Beyond Meat. The plant-based meat products maker saw its shares fall more than 18% in February. The company also released its quarterly results for the final three months of 2020. But its numbers weren’t all that impressive when Beyond reported on February 25 that its net revenue of $ 101.9 million increased just 3.5% year-over-year as felt the impact of COVID-19 and a decrease in demand for its food service channel. The uncertainty on the road ahead is a key reason why the company does not offer any guidance for 2021.
But it is not all doom and gloom for the company: Beyond Meat recently announced an agreement with McDonald’s. Beyond will be the “preferred supplier” of a new plant-based burger called McPlant under a three-year agreement. Although many dining restaurants may be closed or subject to restrictions during COVID-19, fast food chains like McDonald’s can easily serve customers via drive-thrus. So even if you’re concerned about the long-term impact of the pandemic, Beyond still has a way to grow beyond the retail segment, which in the fourth quarter grew at a rate of 76.3% in the US. 139.2% internationally.
The best-case scenario for action would involve a full recovery in the economy this year, which is not so unlikely now that vaccines are on the way. Although it is coming off a difficult quarter, Beyond could still generate some solid growth figures for many years to come, and buying the stock now can be a big move.
This article represents the opinion of the author, who may disagree with the “official” recommendation position for a premium Motley Fool consulting service. We are variegated! Questioning an investment thesis, even one of our own, helps all of us think critically about investing and make decisions that help us be smarter, happier, and wealthier.