The tech sector generated robust gains for investors in 2020 as more people used digital services to work, learn, shop, play, and stay in touch during the pandemic. A retreat from other pandemic-stricken sectors accelerated that shift and turned many tech stocks into defensive plays…
So far, 2021 has been more challenging for many of those tech darlings. Rising vaccination rates are causing investors to shift from pandemic plays to reopening plays, while rising bond yields are sparking a rotation from growth stocks to value stocks.
As a result, the tech-heavy Nasdaq stumbled in the second half of February and the first week of March. That decline spooked many investors who had grown accustomed to the Nasdaq’s ongoing gains, creating some buying opportunities among these now-discounted companies. During the dip, I took advantage of the situation to accumulate more shares of four promising tech stocks: Bumble (NASDAQ:BMBL), Pinterest (NYSE:PINS), salesforce.com (NYSE:CRM), and ASML Holding (NASDAQ:ASML). Let’s find out a bit more about these companies.
Last December, I identified Bumble as my top IPO stock to buy in 2021. But when the female-oriented online dating company finally went public a few days before Valentine’s Day, it came in too hot.
Bumble priced its IPO at $43 a share, but the stock opened at $76 before closing at $70.31 a share on the first day. But during the tech sell-off, I accumulated most of my shares below $60 — which turned out to be a good move, since Bumble’s stock surged after it posted an impressive fourth-quarter report on March 10.
Bumble’s total number of paid users grew 32% year over year in the fourth quarter, and it expects its revenue to rise 32%-34% in fiscal 2021. Based on that estimate, Bumble actually seems cheap at 12 times this year’s sales, since many tech stocks generating comparable revenue growth are still trading at much higher price-to-sales ratios.
Pinterest carved out a high-growth niche in the social media market with its virtual pinboards, which let users pin photos and videos to share their ideas, interests, and hobbies with other users.
Pinterest’s mellow approach insulates it from the hate speech and misinformation controversies plaguing Facebook and Twitter. It’s also a natural fit for online shopping, and many retailers have uploaded their entire catalogs to Pinterest through shoppable pins.
Pinterest posted strong growth among Gen Z and millennial users last year, and it expanded beyond its core female audience and gained more male users who turned to its pinboards for stay-at-home ideas.
Those tailwinds boosted Pinterest’s revenue 48% in 2020, and its monthly active users (MAUs) increased 37% to…
Continue reading at THE MOTLEY FOOL