We recently compiled a list of the 7 Best Buy-the-Dip Stocks to Invest In. In this article, we are going to take a look at where Boeing Co (NYSE:BA) stands against the other buy-the-dip stocks.
It’s every investor’s goal to buy a stock well poised to beat the average return of market indexes. However, with valuations getting out of hand after one of the longest bull runs, very few stocks offer significant upside potential. Nevertheless, some stocks have been battered by deteriorating economic conditions fueled by higher for longer rates.
While it might seem too late to buy stocks with major indices led by the Nasdaq 100 and S&P 500 flirting with record highs, there are still stocks that have been left out from the rallies. Buying the dip is a proven strategy for risk-tolerant investors who are always looking to take action during market downturns.
READ ALSO: 7 Best Beaten Down Stocks to Invest In and Billionaire Carl Icahn’s Top 10 Stocks.
The strategy allows one to buy low when fear has taken over after a deep pullback. It is particularly an effective investment strategy for long-term investors looking to hold stakes in quality stocks for the long haul.
As depicted by the Institute for Supply Management, manufacturing production in the biggest economy slowing down in August is the latest sign that all is not well. Disappointing data with ISM dropping to 47.2 from 48 is the latest sign of slowing growth within the US economy.
According to Larry Tentarelli, chief technical strategist at the Blue Chip Trend Report, the market is expected to be choppy and volatile as it has become data-dependent. Consequently, now would be the best time to be highly cautious, focusing on high-value targets trading at discounted valuations.
On the other hand, Fundstrat’s head of strategy, Mark Newton, believes the market is flashing a handful of signs that there is more upside on the way even as the major indices remain at record highs. According to the analyst, any tech-driven stock pullback presents an ideal buy opportunity on the dip. According to the equity analyst, looking to buy dips makes sense technically, especially for small-cap stocks that look appealing after their recent slide.
The deep pullback in some stocks amid growing concerns about the health of the US economy presents one of the best opportunities to buy the dip of quality stocks trading at discounted valuations. Growth stocks are some of the best, given their track record in outperforming the market.
Certain high-value stocks that have traditionally been steady have recently suffered due to a mix of increasing inflation and high interest rates. In a similar vein, in 2024, there was a shift among investors from big tech firms to smaller, more volatile stocks. Spotting these declines could offer a chance to invest in major companies trading at discounted valuations.
Our Methodology
To make our list of the best buy-the-dip stocks to invest in, we first made a list of stocks in various industries that are trading near their 52-week lows or have pulled back significantly from their 52-week highs. We checked the hedge fund sentiment around 15 stocks with the largest market caps and then selected the 7 stocks that were the most popular among hedge funds. We then ranked the stocks in ascending order based on the number of hedge funds that hold stakes. Our list contains some of the highest quality companies in different industries including mining, energy, consumer staples, retail, aerospace, tech, and more.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A commercial jetliner parked at an airport, reflecting the companies success in aviation.
Boeing Co (NYSE:BA)
52 Week Range: $158.30 – $267.54
Current Share Price: $173.74
Number of Hedge Fund Holders: 42
Market Capitalization as of September 4: $99.22 Billion
Boeing Co (NYSE:BA) is one of the best buy-the-dip stocks to invest in for diversifying an investment, not a portfolio, into the industrial sector. The company and its subsidiaries design, develop and sell commercial jetliners, military aircraft, and missile defense systems. Its Global Services segment offers products and services, including supply chain and logistics management, engineering, maintenance and modifications, upgrades, and conversions.
Boeing Co (NYSE:BA) is one of the stocks that has nosedived significantly, presenting a buy-the-dip opportunity. The stock sell-off has come on the core Boeing commercial airplanes segment suffering from ongoing quality management issues associated with the 737 Max. The company has also been forced to ground its 777x fleet over safety issues.
In its quest to enhance quality assurance and guarantee sufficient fuselage supplies, Boeing Co (NYSE:BA) is acquiring Spirit AeroSystems and might need to invest additional funds into Spirit AeroSystems to better its operations.
Amid the safety issues, Boeing is still one of the biggest airplane makers and faces minimal competition in the sector. It is one of the reasons that deliveries have been improving with the narrow body 737 Max attracting 158 orders in the recent quarter. As it stands, Boeing has 4,741 unfilled 737 max orders in its backlog.
In August, the aerospace giant delivered 42 aircraft, keeping pace with its July performance. If Boeing Co (NYSE:BA) continues to achieve this delivery pace through September, the third quarter of 2024 will significantly improve compared to the previous quarter. This forecast highlights a possible upward trend in Boeing’s operational efficiency as it strives to recover from the effects of the pandemic in the aviation sector.
Even though it has encountered obstacles, shown by a pessimistic P/E ratio of -28.19 and a minor drop in revenue by 0.07% in the past year, the company is currently trading close to its lowest point in the past 52 weeks, which could be a chance for long-term investors to purchase shares.
At the end of the second quarter of 2024, 42 out of the 912 hedge funds profiled by Insider Monkey had bought and owned Boeing Co (NYSE:BA) shares.
Overall BA ranks 3rd in our list of the buy-the-dip stocks to invest in. While we acknowledge the potential of BA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BA, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.