© Reuters. Here’s Why You Should Buy These 2 Tech Stocks
The Nasdaq recently hit new all-time highs as earnings season has been quite strong leading to a flurry of upgrades and EPS estimate revised higher. Taylor Dart identifies two stocks worth buying now: Hewlett Packard (HPQ) and NortonLifeLock (NASDAQ:).It’s been a strong year thus far for the major market averages, with the (QQQ) hitting new all-time highs this week, pushing its year-to-date return to more than 16%. While this is great news for investors and has translated to solid returns, this impressive performance has made it quite difficult to add new exposure, given that there are very few names offering a margin of safety after a 110% rally off the March 2020 lows. It’s also made it riskier to add exposure, given that sentiment is through the roof, which often leads to sharp corrections to correct the excess. However, for those looking to build a shopping list, if we do get a correction, a couple of tech names are trading at very reasonable valuations and can be bought on any sharp dips. We’ll look at these two names below:
Hewlett Packard (HPQ) and NortonLifeLock (NLOK) have little in common with one being a hardware company and the other being a cybersecurity software company, but both do share one trait, severely discounted valuations to their peer group. In NLOK’s case, the company trades at just 14x next year’s earnings estimates, while HPQ trades less than 8x this year’s estimates. While neither company is an industry leader by any means, these are very reasonable valuations, baking in a significant margin of safety if we do see further pullbacks. As a bonus, both companies also pay ~2.0% plus annual dividend yields, offering investors additional returns from a total return. Let’s take a closer look below:
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