The weekly drop of nearly 6% in the S&P 500 (SPY) index and a devastating 7.3% for the NASDAQ, as measured by the NASDAQ ETF (QQQ) is creating attractive entry points for value investors. Which sectors and stocks are trading at attractive value?
In the media and entertainment space, Disney (NYSE: DIS) stock fell below $100, for the first time since November 2017. At a P/E of just 16 times, this giant is sure to win its investors back with a blockbuster movie release this year. Already, Star Wars is constantly a hit and the stock rallies after the results.
Comcast (CMCSA), at a 15.8 times P/E, looks too cheap to pass up. Worries over its video subscriber base are pressuring the stock.
On the borderline of buy and sell is General Mills (NYSE: GIS). In its earnings report, the company warned that it faced inflationary pressure and questioned its flexibility in passing costs to consumers.
Stocks to Avoid
Not all stock drops are equal. Though not at a yearly low, IBM (NYSE: IBM) could be a value trap. Its sports a 12.4x P/E but the growth drivers in the company are still too small. Any market slowdown will hurt them but as long as IBM’s core businesses – mature and slow – thrive, IBM’s stock could hold up the selling pressure.
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