While stocks have been generally loaded in 2022, there are a bunch of Nasdaq stocks that are trading at a discount.
For example, The Nasdaq 100 Index was down 26.5% by July 8. The same applies to the whole Nasdaq Composite Index. Forehead Dow Jones Industrial Average is lower by more than 14%.
It’s hard to jump into stocks at a time when the Nasdaq Composite just hit its mark worst first six months of the calendar year in the records. This is not a falling knife you want to catch. Macroeconomics has become a popular topic for market professionals and analysts. I don’t think a lot of problems are going to go away anytime soon.
But if you can look beyond the next six months, these seven Nasdaq stocks trading at a discount should see a healthy rebound in 2023 and beyond.
|NXST||Nextstar Media Group, Inc.||$165.14|
|EXP||Expedia Group, Inc.||$90.27|
|PDCE||PDC Energy, Inc.||$54.31|
|WSC||WillScot Mobile Mini Holdings Corp.||$32.24|
Trading Nasdaq Stocks at a Discount: Steel Dynamics (STLD)
Steel Dynamics (NASDAQ:STLD) experienced a considerable slide in 2022. Its high-low range is over $50, with a high of $100.37 in April and a low of $50.54 in January. It has lost 34.1% of its value since its peak in April.
Steel Dynamics is one of the largest and most profitable steel producers in the United States. Currently investing 2 billion dollars in the construction of a new flat roll steel mill in Texas. The plant will give it a leading position in the production of steel in electric arc furnaces in America. The plant increases steel production capacity by more than 25%. About 70% of its production is destined for the Mexican market.
In mid-June, Steel Dynamics led for the second quarter (Q2). It expects earnings per share (EPS) of $6.63 in the middle of his leadership. This is 10.1% more than in the first quarter of 2022.
For the trailing 12 months ended March 31, Steel Dynamic’s free cash flow (FCF) was 1.91 billion dollarsgiving it an FCF yield of 15.3%.
Nextstar Media Group (NXST)
News in late June indicated that the company was pursuing a broadcast network CW appears to be nearing the finish line. Nextstar would owns 75% of CWmeanwhile Paramount Global (NASDAQ:STEAM) and Warner Bros Discovery (NASDAQ:WBD) would each have 12.5%. The CW was formed in 2006 when UPN merged with The WB as a 50/50 venture between Paramount and Warner Bros.
Over the past five years, Nexstar has grown its revenue by 91.4% 2.43 billion dollars in 2017 until 4.65 billion dollars in 2021. During the same period, its operating profit jumped 133.4% to $1.18 billion from $505.63 million in 2017.
As for Nexstar’s performance in 2022, NXST stock is up 8.5% year-to-date, significantly outperforming the Nasdaq Composite. However, its profit yield is the same 12.25%, which is 212 basis points higher than the company’s five-year average. Additionally, its forward price-to-earnings (P/E) ratio is 7.42, which is 349 basis points below its five-year average.
Gaining majority control of the CW will give it more prominence. This should bring more investors into NXST stock.
Nasdaq Stocks Trading at a Discount: Expedia Group (EXPE)
Despite Expedia Group (NASDAQ:EXP) more than a 50% drop in 2022, if you acquired the online travel company’s stock during the March 2020 correction, you’d still be up 88% in 27 months.
The latest decline in Expedia’s stock price is a large number of cancellations by airlines is struggling to cope with the growing demand for travel and labor shortage. EXPE shares fell 26.6% in June. In addition, investors are concerned that pent-up travel demand will slow fear of recession there is still a possibility.
In fact, Expedia’s various travel brands: Expedia, Hotels.com, Vrbo, Travelocity, Hotwire, etc., provide travelers with a single technology platform for booking hotels, vacation rentals, flights, car rentals, cruises and activities while traveling.
The global travel market is estimated at $1.5 trillion annually. Expedia continues to transform its business to gain a more significant share of this global market.
Maja is a company triggered Expedia Group’s Open World technology platform to help all of its travel partners succeed.
Expedia’s business is close to a comeback pre-pandemic levels. Still, its shares are valued well below their five-year average. Its price-to-sales ratio is 1.5136% below its five-year average, while its forward P/E is 14.45, down 63%.
PDC Energy (PDCE)
You may find it strange that I included an oil and gas company such as PDC energy (NASDAQ:PDCE) in my list of seven Nasdaq stocks trading at a discount. However, the company’s shares haven’t done much in 2022 – up 11.7% year-to-date compared to 34.7% for ExxonMobil (NYSE:XOM) — despite creation 1.02 billion dollars in the next 12 months FCF up to March 31.
PDC operates the Wattenberg field in Colorado, which accounts for 86% of annual production, and the Delaware Basin in West Texas, which accounts for 14% of its production. In 2022, he expects honey production 235,000 barrels of oil equivalent per day and 250,000. About 33% of this is oil and the rest is natural gas or natural gas liquids (NGL).
It will generate $1.7 billion in FCF over the last six quarters through the second quarter of 2022. It expects to generate more than that in 2022 and 2023. It aims to return at least 60% of its FCF to shareholders through dividends and share buybacks.
PDC Energy has a current FCF yield of 17.6%. In 2014, the last time oil prices were above $100, PDCE stock traded at 6.24 times cash flow, nearly double its current value. He deserves to go for a run.
Nasdaq Stocks Trading at a Discount: Hologic (HOLX)
The company’s diagnostic activity has grown significantly over the past two years due to the sale of tests for Covid-19. In the first quarter, it had revenue from Covid-19 testing of $584.1 million. Including other covid-19-related revenue, its covid-19 revenue was $696.7 million in the second quarter of 2022, down slightly from $782 million in the second quarter of 2021.
It expects full-year 2022 revenue of at least $4.6 billion, up $200 million from previous guidance. Basically, its outlook calls for non-GAAP earnings per share of $5.55 in the middle of its guidance, up 50 cents from its previous projection.
Out of 17 analysts covering HOLX stock, eight rate it a “buy”, two rate it “overweight” and seven have it a “hold” with a medium price target $80.50.
As a company focused on women’s health, it’s naturally concerned about what’s going on because of Roe v. Wade overturned by the Supreme Court. Like many companies, it will reimburse employees who travel out of state for abortion services.
If you believe in a woman’s right to choose, Hologic is an investment and a company you should get behind.
WillScot Mobile Mini Holdings (WSC)
On July 1, 2020, WillScot Corporation and Mobile Mini Inc. combined to design WillScot Mobile Mini Holdings (NASDAQ:WSC), a leading provider of modular space and portable storage solutions in the US, UK, Canada and Mexico. Mobile Mini shareholders received 2.4050 shares of WillScot Class A common stock for each share held.
The company is the number one competitor in the North American market for modular room and portable storage solutions. The market is valued at more than 10 billion dollars annually.
It expects to achieve an FCF margin of between 20% and 30% over the next 3 to 5 years, amounting to $650 million in annual FCF. Currently, its trailing 12-month FCF margin is approx 11%or $210 million. However, with over 85,000 customers worldwide, it’s sure to hit the mark sooner rather than later.
The company’s three largest end markets are non-residential and golf courses at 14% of revenue, professional services at 13%, and subcontracting and retail and wholesale at 11%.
Over the next five years, it expects to return about $2.5 billion to $3 billion in dividends and share buybacks. It increased its return on invested capital from 4.6% in 2018 to 12% in the last 12 months ending in the first quarter of 2022.
Average target price 11 analysts his inventory cover is $47. Nine out of 11 analysts rate it a “buy.”
Trading Nasdaq Stocks at a Discount: Flex (FLEX)
Flex (NASDAQ:FLEX) started in Silicon Valley in 1969. It was then known as Flextronics. In 1981, he started contract manufacturing of personal computers and other electronic devices. It became public in 1987. In 2015, it changed its name to Flex to reflect the diverse nature of its manufacturing capabilities.
In early May, the company reported on its Q4 2022 and full-year results. Flex had annual sales of $26 billion, up 7.9% year-over-year. It expects peak sales of $28.2 billion in fiscal 2023, at the midpoint of its guidance.
In the end, its full-year adjusted net profit for 2022 was $945 million, up 18.9% year-over-year. It expects adjusted earnings per share of at least $2.09 in 2023, up 6.6% from 2022’s $1.96.
The company has three business segments: Flex Agility Solutions, which includes communications infrastructure, devices, consumer packaging, mobile consumer devices and more; Flex Reliability Solutions, which includes smart technologies, medical devices, industrial devices, renewable energy sources and more; and Nextracker, a solar tracker provider.
In February, Flex sold $500 million in stock in its solar subsidiary. The company paid $330 million for Nextracker in 2015. Nextracker estimated the sale of shares at 3 billion dollarsor nearly 46% of its current market cap.
Trading at just 0.27 times sales, Nextracker’s current share price – down 22.6% YTD – is very interesting.
On the day Will Ashworth was published did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, with consideration InvestorPlace.com Publishing Guidelines.