Looking to Bottom Fish? 3 Stocks Down 30-40% to Buy Now

The stock market has been under immense pressure due to the twin fears — soaring inflation and economic contraction. The ongoing Russia-Ukraine war and supply chain disruptions have also…

caused shockwaves to the market.

The Fed recently raised interest rates by 75 basis points, the largest hike since 1994. The central bank has also signaled more rate hikes in the near term to clamp down on inflation, increasing the odds of the economy tipping into a recession. However, a top strategist at JPMorgan believes the U.S. economy will dodge a recession altogether.

Several fundamentally sound stocks have declined significantly in price this year as investors weighed the risk of an economic slowdown. However, we think QUALCOMM Incorporated (QCOM), Semtech Corporation (SMTC), and Good Times Restaurants Inc. (GTIM) appear to have bottomed after declining 30-40% year-to-date.

Given the potential rebound from the current price levels, these stocks could be ideal additions to your portfolio.

QUALCOMM Incorporated (QCOM)

QCOM engages in developing and commercializing foundational technologies for the wireless industry worldwide. The company operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI).

On May 17, Advanced Micro Devices, Inc. (AMD), a semiconductor company, and Qualcomm Technologies, Inc., a subsidiary of Qualcomm Incorporated, announced a collaboration to optimize the Qualcomm® FastConnect™ connectivity system for AMD Ryzen™ processor-based computing platforms and bring secure Wi-Fi remote management to AMD enterprise customers.

This marks their first step in bringing superior wireless connectivity to the AMD mobile computing roadmap. This partnership should prove to be strategically beneficial for the company.

On April 4, QCOM announced the completion of its acquisition of Arriver™ from SSW Partners, which should enhance Qualcomm Technologies’ ability to deliver open, fully integrated, and competitive Advanced Driver Assistance System (ADAS) solutions to automakers and Tier-1 suppliers at scale.

“As we become a key technology partner to the automotive industry, Arriver’s Driver Assistance assets will accelerate our efforts to deliver a leading ADAS solution as part of our Snapdragon® Digital Chassis™ platform,” said Nakul Duggal, senior vice president and GM, automotive, QCOM.

For the fiscal second-quarter ending March 2022, QCOM’s revenue increased 40.8% year-over-year to $11.16 billion. Its non-GAAP earnings before taxes grew 68% from the year-ago value to $4.26 billion. Non-GAAP net income for the quarter stood at $3.67 billion, reflecting a 67.6% increase year-over-year. Moreover, the company’s non-GAAP EPS was $3.21, up 69% from the prior-year quarter.

Street expects QCOM’s EPS for the current quarter ending June 2022 to improve 49.8% year-over-year to $2.88. The consensus revenue estimate of $10.88 billion for the same period represents a 36.1% increase year-over-year. The company also surpassed the consensus EPS estimates in each of the trailing four quarters.

The stock has slumped 34.3% year-to-date and 9.1% over the past month to close yesterday’s trading session at $120.09.

QCOM’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, translating to Strong Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

QCOM has a B grade in Value, Growth, and Quality. It is ranked #8 of 96 stocks in the B-rated Semiconductor & Wireless Chip industry.

In addition to the POWR Rating grades I’ve just highlighted, you can see the QCOM’s ratings for Stability, Sentiment, and Momentum here.

Semtech Corporation (SMTC)

SMTC designs, develops, manufactures, and markets analog and mixed-signal semiconductor products and advanced algorithms.

On June 21, SMTC announced the launch of a SaaS chip-to-Cloud service, LoRa Cloud™ Locator, that uses SMTC’s LoRa Cloud Modem & Geolocation services to demonstrate the asset tracking capabilities of LoRa Edge™. The service allows customers to experience the power of LoRa Edge™ devices and evaluate the platform’s accuracy and power consumption capabilities. This is expected to…

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