In this article, we shall talk about the 5 best falling stocks to buy now. If you wish to read our detailed analysis of the latest market situation, go directly to 11 Best Falling Stocks To Buy Now.
5. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 81
Year-to-Date Share Price Decline (as of August 9): 31.72%
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s largest semiconductor foundry, producing chips for clients including Apple, NVIDIA, and AMD, among others. Shares have fallen more than 31% in the year to date as of August 9, as lockdown disruptions, supply chain issues, and the looming threat of the Chinese invasion of Taiwan put TSM stock under pressure.
But given the firm’s crucial and dominant role in powering the global tech industry, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stands as a recession-proof stock that offers long-term security.
On August 3, Northland analyst Gus Richard reiterated an ‘Outperform’ rating on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) shares and increased the price target to $105 from $95. The analyst thinks that lead times for wafers out of the company will limit upside over the remainder of 2022, but server market share momentum will accelerate heading into 2023. The analyst also contends that rival Intel (NASDAQ:INTC) cannot catch up with Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in terms of server CPU leadership until 2024.
For Q2 2022, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) posted $17.83 billion in revenue, growing 33.9% from the year-ago quarter and beating estimates by $327.19 million. EPS of $1.55 also came in above analysts’ forecasts by $0.05.
Hedge funds increased their exposure to Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) during the first quarter of 2022. 81 hedge funds were long TSM at the end of March, as compared to 72 hedge funds at the close of December.
Here is what ClearBridge Investments had to say about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q2 2022 investor letter:
“Disciplined selling is a key component of our risk-based approach, especially among companies with cyclical growth drivers. We have seen good success over the last several years from our semiconductor exposure but have been taking profits in companies such as, this quarter in Taiwan Semiconductor (NYSE:TSM) to reduce overall industry exposure. Given the exceptional sets of circumstances of semi shortages, double ordering and good growth in end market products including personal electronics and even data centers, we believe a neutral market position to this industry within the tech sector is appropriate.”
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 102
Year-to-Date Share Price Decline (as of August 9): 43.37%
NVIDIA Corporation (NASDAQ:NVDA) is a prominent maker of semiconductor chips serving the gaming, data center and cloud computing markets around the world. The company is yet another prominent, long-term beneficiary of the $52 billion CHIPS Act passed by the US government, which aims to bolster local production of critical semiconductor technology.
Of the 900+ hedge funds tracked by Insider Monkey, 102 were found with NVIDIA Corporation (NASDAQ:NVDA) stock in their portfolios at the end of the first quarter. The collective value of these positions stood at $6.35 billion. Disruptive tech investor Cathie Wood’s ARK Investment Management significantly increased its exposure to NVDA recently, and stands as a prominent Q2 investor with a $126 million stake.
On August 9, Truist analyst William Stein recently reiterated a ‘Buy’ rating on NVDA shares, and lowered the price target to $216 from $283. The company posted a negative Q2 pre-announcement, and the analyst notes that weakness in the gaming sector may persist into the third quarter before recovering by April 2023. Stein observed that the miss in the AI and data center segments was related to supply chain issues, and sees overall demand remaining constructive.
Here is what ClearBridge Investments had to say about about the performance and market position of NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2022 investor letter:
“Chipmaker Nvidia (NASDAQ:NVDA) has also been pressured by multiple compression of higher growth companies and weakness in its gaming business. While Nvidia has grown into a top 10 position with its strong performance through late 2021, we have been consistently trimming the position to derisk against short-term volatility in its gaming business. The company is clearly exposed to the semiconductor cycle but also participates in the secular growth of cloud and AI adoption through its data center business. With these secular drivers intact and new products ramping up in the second half of the year, we are maintaining an overweight to the company.”
3. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 110
Year-to-Date Share Price Decline (as of August 9): 28.66%
JPMorgan Chase & Co. (NYSE:JPM) is the largest bank in the United States, offering a range of financial services such as investment banking, retail banking, wealth management and asset management. JPM shares are currently trading at a P/E (price to earnings) ratio of 9.24, and have shed 28.7% in value since the start of 2022, presenting an excellent buying opportunity for investors.
On July 18, Berenberg analyst Peter Richardson upgraded JPMorgan Chase & Co. (NYSE:JPM) to ‘Hold’ from ‘Sell’ with an unchanged price target of $120. Richardson sees JPM shares trading at a 20% discount to their long-run average, and given the temporary nature of the headwinds, the analyst sees downside risks to the bank’s share price as quite limited.
Carillon Tower Advisers talked about many stocks in its Q1 2022 investor letter, and JPMorgan Chase & Co. (NYSE:JPM) was one of them. It said:
“More cyclical sectors, including technology and consumer discretionary, were among the weakest, likely due to rising interest rates and inflation. It was encouraging to see the quarter finish on a strong note with the S&P 500 only about 5% away from its all-time highs. Shares of JPMorgan Chase (NYSE:JPM) detracted from performance due to the company’s increased expense guidance, announced in January.”
2. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 113
Year-to-Date Share Price Decline (as of August 9): 31.42%
Walt Disney Company (NYSE:DIS) is a global media and entertainment conglomerate with interests in theme parks, studio films, and digital streaming through its Disney+ platform. The Q1 database of Insider Monkey shows 113 hedge funds with long bets on the company shares, with a collective price tag of $5.16 billion.
On July 26, Truist analyst Matthew Thornton lowered the firm’s price target on The Walt Disney Company (NYSE:DIS) to $125 from $135 and maintained a ‘Buy’ rating on the company shares. The analyst sees Disney’s 2024 target of 230-260 million subscribers as hard to achieve given the loss of IPL cricket streaming rights, but he thinks a figure around 206 million is achievable. The analyst is bullish on the opportunity to bolster gross adds, retention, and average revenue per user. Disney’s theme parks business could also recover to higher revenue and profitability, observed Thornton in his thesis.
Despite shares being down 31.42% in the year to date, Walt Disney Company (NYSE:DIS) is a an attractive option for investors with a view for long-term gains. Popular hedge funds held major stakes in the company during the first quarter, and its largest shareholder at the end of March was Matrix Capital Management, which held 6.33 million shares worth roughly $868 million.
Oakmark Fund, an investment firm, shared a bullish outlook on The Walt Disney Company (NYSE:DIS) as part of its Q2 2022 investor letter. Here’s what they said:
“Disney (NYSE:DIS) is one of the most beloved consumer companies in the world. Its media business has a rich library of intellectual property, which provides a powerful engine for creating new content across the Disney, Pixar, Marvel, and Star Wars brands. This content also contributes to the success of Disney’s theme parks, which generated nearly half the company’s earnings and grew more than 10% annually in the decade prior to the pandemic. Shares have fallen nearly 50% over the past year as investors worried about the company’s ability to transition its media business to a direct-to-consumer streaming world. This transition has required management to make investments in its Disney+ streaming service that are depressing profitability today. However, we believe these investments will ultimately produce attractive returns as Disney+ continues to grow subscribers and increase pricing over time. As a result, we were able to purchase shares at a substantial discount to our estimate of intrinsic value.”
1. Meta Platforms, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 200
Year-to-Date Share Price Decline (as of August 9): 49.71%
Meta Platforms, Inc. (NASDAQ:FB) has slid almost 50% since the start of 2022, as increasing competition from Tiktok, Apple’s recent privacy law changes, and a cool down of online activity back to pre-pandemic levels has affected the stock. Still, Facebook, Instagram and WhatsApp remain among the most downloaded and used platforms around the world, and with recent strategic investments into the ‘Metaverse’, Meta Platforms, Inc. (NASDAQ:FB) is poised to remain one of the most dominant names in the internet/tech space, offering investors the guarantee of long-term gains.
On July 28, JMP Securities analyst Andrew Boone lowered the firm’s price target on Meta Platforms, Inc. (NASDAQ:FB) to $215 from $240, and maintained an ‘Outperform’ rating on the company shares. The analyst sees Q2 results and guidance reflecting the challenging macro environment which is weighing on advertiser sentiment, but sees META as a “must-buy” stock given nearly 3 billion daily active users on the platform. The company shares are trading at 14x estimated 2023 GAAP earnings, according to Boone, who sees a positive risk/reward for investors at current levels.
For the second quarter, Meta Platforms, Inc. (NASDAQ:FB) posted earnings per share which came in $0.09 below analysts’ predictions. Revenue of $28.82 billion was recorded $129.65 million below estimates, and represented the first year-over-year quarterly revenue drop in the firm’s history, sliding 0.88% from the period last year. Despite the recent hiccups, Q2 revenue showed a significant jump of 70% from the second quarter of 2019.
A total of 200 hedge funds from our Q1 database disclosed ownership of stakes in Meta Platforms, Inc. (NASDAQ:FB) with a combined value of $19.33 billion. This is down from 224 hedge funds with bullish bets a quarter earlier.
Boyar Value Group, an asset management firm, talked about a few stocks in its Q4 2021 investor letter, and Meta Platforms, Inc. (NASDAQ:META) was one of them. Here is what the fund said:
“Corporate executives can have many different reasons for selling shares (anticipation of tax law changes, philanthropy, diversification, and much more), but the sheer number of billionaire founders who sold shares in 2021 should raise eyebrows and might well be signaling a market top. Bloomberg’s Ben Steverman and Scott Carpenter report not only that Mark Zuckerberg of Meta Platforms, Inc. (NASDAQ:META) (formerly known as Facebook) sold shares in his company almost every day last year but also that the founders of Google sold ~$3.5 billion worth of stock (the first time either Sergey Brin or Larry Page has sold shares since 2017).”
You can also take a look at 15 Best Semiconductor Stocks to Buy Now and 10 Best Dividend Stocks for Passive Income.
