While last year presented challenges for sectors not tied to the hydrocarbon energy space, the technology-related segment suffered horrendously. Though it does lead to opportunities in battered stocks to buy this year. And, if you believe in the buy-low, sell-high philosophy, you may want to read ahead. Fundamentally, the battered stocks to buy on this list present rational reasons for believing in their resurgence. Perhaps they’re undervalued relative to earnings or sales. Or they may enjoy either Wall street analyst support and/or sizable price targets. And some ideas just might be too heavily discounted to ignore.
For other potential ideas, you can check out MarketWatch’s list of the biggest losers of 2022. Since there are only so many hours in a day, below are seven battered stocks to buy for 2023.
| SE | Sea Ltd. | $65.01 |
| PYPL | PayPal | $74.66 |
| MTCH | Match Group | $43.63 |
| STX | Seagate Technology | $70.26 |
| AMD | Advanced Micro Devices | $78.50 |
| DIS | Walt Disney | $105.22 |
| META | Meta Platforms | $172.88 |
Sea Limited (SE)
Starting off this list of battered stocks to buy, Singapore-based tech conglomerate Sea Limited (NYSE:SE) isn’t on MarketWatch’s list above. But it could dubiously “deserve” to be. For instance, in the trailing year, SE remains down 49% below parity. And that’s inclusive of the nearly 23% lift it enjoyed since the Jan. opener this year. Frankly, such a framework doesn’t inspire confidence.
At the same time, I look to the fundamentals, as in the bigger-picture fundamentals. According to a Reuters article published in October last year, experts project Southeast Asia’s internet economy to be worth $330 billion by 2025. This tally actually represents a downgrade from a previous forecast due to economic uncertainty. Nevertheless, the main target is that by 2030, this subsector should reach a valuation of $1 trillion. Now, it could be possible that this forecast might be delayed one or two years. Fine – that’s not a reason to murder SE stock. If you’re patient, I believe this is one of the battered stocks to buy.
PayPal (PYPL)
Fundamentally, the narrative undergirding PayPal (NASDAQ:PYPL) comes down to the burgeoning gig economy. Experts project that by 2028, the global gig economy could reach a valuation of $873 billion. From 2022 to the end of the forecasted period, this expansion translates to a compound annual growth rate (CAGR) of 16.18%. The gig economy is happening and PayPal offers an excellent platform for gig workers (i.e. independent contractors).
Of course, PayPal plies its trade in the broader financial technology (fintech) segment. And fintech features incredible competition – part of the reason why PYPL performed so poorly. Per MarketWatch, shares plunged 62.2% in 2022. Even in the trailing year, shares remain 28% below parity. However, PayPal commands a long operational history dating back to the dawn of the (modern) internet. Not too many of its competitors can say that.
Also, PYPL enjoys support from Wall Street analysts, who peg it as a consensus moderate buy. And get this – their average price target stands at $112.89, implying over 51% upside potential. Thus, it’s easily one of the battered stocks to buy.
Match Group (MTCH)
From a financial perspective, I can see why Match Group (NASDAQ:MTCH) was one of the biggest losers in 2022. Per MarketWatch, MTCH ended up shedding 68.6% of its market value. Throughout 2022, the inflation rate skyrocketed against historical norms. Therefore, it imposed an affordability crisis on the social scene, if you catch my drift. Later, the Federal Reserve’s interest rate hikes discombobulated the overall framework, posing serious business problems.
To be completely transparent, the economic circumstances don’t particularly bode well for retail consumer-related enterprises. For instance, mass layoffs – especially for high-paying positions – don’t offer much encouragement. Nevertheless, Match offers a convenient online mechanism for people to socially connect (I’m going to stick with neutral phrasing here).
Plus, Match presents a greater incentivization profile than your typical consumer discretionary service. Social connection represents a pertinent human need. In that way, then, Match partially benefits from inelastic demand. Finally, Wall Street analysts dig MTCH, pegging it a consensus moderate buy. Also, their average price target stands at $60.23, implying 38% upside potential.
Seagate Technology (STX)
A data storage company, Seagate Technology (NASDAQ:STX) invariably suffered steep losses last year. First, the environment of rising borrowing costs didn’t favor the growth-centric tech ecosystem. Second, the negative impact on data centers led to slower demand for storage equipment. Therefore, it wasn’t particularly surprising that STX ranked among the biggest losers that MarketWatch identified.
According to the publication, STX gave up 53.4% of equity value in 2022. It’s still down significantly on a trailing-year basis. However, since the January opener, STX gained over 35%. Moving forward, contrarians might target it as one of the battered stocks to buy.
Financially, Seagate’s Shiller price-earnings ratio pings at 14.49 times. In contrast, the sector median stands at 22.16 times. Thus, as a discount to earnings, Seagate ranks better than 69% of its peers. Further, its three-year revenue growth rate stands at 12.6%, outpacing the 74.39% of its rivals. And its net margin of 6.61% beat out nearly 64% of the industry. To top it off, hedge fund sentiment for Seagate ranks as very positive. Therefore, it’s one of the battered stocks to buy for those who enjoy taking smart risks.
Advanced Micro Devices (AMD)
Due to the sharp headwinds of 2022, semiconductor specialist Advanced Micro Devices (NASDAQ:AMD) took quite a beating. For one thing, the chip-manufacturing space broadly suffered damage as consumer sentiment sank. Further, the cryptocurrency market imploded last year. As you probably know, AMD’s graphics processing units (GPUs) undergird blockchain-mining rigs.
According to MarketWatch, AMD suffered a hefty blow of 55% in 2022. It’s still hurting, with the security down 31% in the trailing year. Nevertheless, since the January opener, AMD managed to pop up nearly 23%. Now, the question is, can the semiconductor firm keep the momentum going?
To be blunt, I don’t think the crypto market will cooperate with AMD despite the complex’s recent resurgence. Fundamentally, the Fed’s top priority centers on controlling inflation. So, we may not be done with the interest rate hikes yet.
However, as consumers adjust to new realities, AMD’s influence in home entertainment could lift the mood. Notably, Wall Street analysts want to give AMD a chance, pegging it a consensus moderate buy. Also, their average price target stands at $92.86, implying over 18% upside potential. Thus, it could make an interesting case for battered stocks to buy.
Disney (DIS)
If you want some three-dimensional chess in your battered stocks to buy, check out entertainment giant Disney (NYSE:DIS). While not a pure-play tech firm, Disney’s foray into streaming services makes it tech adjacent at the least. Unfortunately, consumer pressures associated with the malaise of 2022 hurt DIS stock badly. Per MarketWatch, shares tumbled nearly 44% last year.
According to Sarah Smith, InvestorPlace’s Editor-in-Chief, earlier this month, Disney announced that it would cut 7,000 jobs or roughly 3% of its workforce. About a month before, Disney also put an end to hybrid work arrangements. Of course, remote workers cried foul, signing a petition about how this would impact morale among other challenges. Realistically, though, signing petitions to a company announcing mass layoffs represents an utterly foolish thing to do. My guess is that if people are silly enough to do that, they’re reckless enough to go through with their threats.
And you know what that would mean? Disney gets off the hook regarding paying unemployment insurance because disgruntled workers quit voluntarily. Again, it’s a very stupid move but it’s great for the shareholder. So, DIS is one of the battered stocks to buy.
Meta Platforms (META)
Easily one of the biggest losers last year was Meta Platforms (NASDAQ:META). Once one of the undisputed kings of tech, Meta suffered a reality check due to declining digital advertising sales. Further, it eventually had to do the unthinkable, joining other tech firms in mass layoffs. However, the pain that it’s absorbing could be a good thing in the long run, making META among the battered stocks to buy.
Financially, Gurufocus.com identifies META as a significantly undervalued investment based on its proprietary calculations for fair market value. Also, according to the investment resource’s discounted cash flow analysis, META’s fair value may be $295.24. At the time of writing, shares traded hands at $172.88. From that angle, META may have a 71% upside potential. Fundamentally, despite economic obstacles, enterprises must advertise to stay ahead of the game. Therefore, I expect the digital ad market to bounce back, boding well for META.
Finally, Wall Street analysts peg META as a consensus strong buy. Further, their average price target stands at $215.20, implying over 24% upside potential. Thus, it’s one of the enticing examples of battered stocks to buy.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.