Stocks on sale after the coronavirus crash
There’s no denying that the coronavirus outbreak has left small cap stocks in shambles. While Bowser stocks have been outperforming major indices, many of them have still sold off quite a bit. Even companies that don’t expect to lose business are still losing plenty of market value. Below is a year-to-date (YTD) chart of how Bowser recommendations have performed in comparison to the Russell 2000 Index:
Since we focus on companies with strong fundamentals, we’re not used to seeing this kind of volatility. However, because of their market correlation, most of our recommendations have pulled back.
Just because a stock has pulled back doesn’t mean it offers an appealing entry point. So which Bowser stocks are on our radar after selling off?
Of the three listed stocks, two have had some incredible returns over the past few years. RADA shares gained as much as 127% since the start of 2018 and recently dropped 55% in just two months. LSYN shares gained 148% over the same time period and is down 41% in one month. Although these pullbacks may seem substantial, it’s common for growth stocks to selloff during volatility spikes.
Neither RADA nor LSYN are undervalued, but offer great opportunities under $3 per share. In fact, one of the guidelines in our Game Plan is to never pay more than $3 for a penny stock. This helps you avoid overpaying and makes you focus on stocks with much better risk-to-reward ratio.
RADA is one of our favorite stocks because of its high year-over year revenue growth rate of 58% and huge increase in demand across all business segments. The company also stated that the COVID-19 outbreak is not negatively effecting its business and reaffirmed outlook. LSYN is another one of our preferred growth stocks due to its recent focus on creating shareholder value and maintaining growth. The podcast industry is booming and LSYN is one of the leading companies that’s actually turning a solid profit and generating organic growth.
We’ve included LOAN on our list due to the value it can generate over time. Many of our subscribers have had tremendous success with this stock in the past. This is mainly a result of its undervaluation, asset efficiency, and high dividend yield of 12%. Yes, you read that correctly, 12%! That kind of dividend combined with the recently announced share repurchase program puts this stock at the top of our list. The only issue is that it’s currently trading above $3, but if the markets continue to drop then it will likely come back into buying range.
All in all, there are plenty of discounts surfacing because of the market volatility. Instead of trying to jump ship after the initial selloff, consider adding some diversity to your portfolio with some of our top stocks. Many of our recommendations have taken a hit during these trying times, so put your cash to work!