There has been a massive sale of stocks in the current financial market dip into the bear market. Millionaires and Billionaires are opening their vaults on reserved cash to take advantage of the heavily discounted stocks to buy.
Stock and shares have become the new and top-list investment during the pandemic. Covid-19, with its many ills, has brought a myriad of opportunities. First is the market correction, which is not a focus of this post but the aftermath of its economic crunch.
The Russia – Ukraine war is at the top of the headline, bringing uncertainty that has caused a dip in the market.
Let’s take a quick dive into a few of the best discounted stocks to buy right now.
Table of Contents
What is Discounted Stock?
Discounted stock refers to shares of a company that are being sold at a lower price than their current market value.
This discounted price can be due to various factors, such as market conditions, the company’s financial performance, or specific events affecting the company.
Discounted stock can be an opportunity to purchase shares at a reduced price, potentially allowing you to benefit from future price appreciation.
However, it is important to carefully analyze the reasons behind the discount and evaluate the company’s fundamentals before investing.
It’s also essential to conduct thorough research and analysis before investing in discounted stock.
Consider factors like the company’s financial health, competitive position, growth prospects, and overall market conditions.
Additionally, it is advisable to diversify your investment portfolio to spread the risk across different stocks and sectors.
Keep in mind that investing in discounted stock carries risks, as there may be reasons why the stock is discounted.
It is recommended to consult with a financial advisor or conduct your own research to make informed investment decisions.
The 7 Best Discounted Stocks to Buy Right Now
1. Nvidia (NVDA) -37.55% YTD LOSS
- Market cap: $471.03B
- Current price: $188.11
Nvidia is perhaps the game-changer for the industry and a substantive component of the S&P thinking about artificial intelligence, computer software and hardware and cloud computing.
For FY2022, Net Income was $9.75 and Total Asset $44.18. All on an upside, and with a 38% YTD loss, Nvidia falls within the discounted stocks to buy right now.
2. Coinbase (COIN) -70.00% YTD LOSS
- Market cap: $16.72B
- Current price: $75.32
Are you scared or skeptical about Crypto? Coinbase is perhaps the largest cryptocurrency exchange in North America. Her profits are earned from commissions and fees on trading crypto, making it a robust business model like any other business.
Like many other firms, it has suffered losses in 2022 and is bound to bounce back to its glory days. Analysts speculate an upside of 100% in the stock price in the next 12 months. With a 70% YTD loss, Coinbase falls within the discounted stocks to buy today.
3. Roku Inc (ROKU) -58.63% YTD LOSS
- Market cap: $13.12B
- Current price: $96.47
Roku is becoming a significant market brand in the digital media player with over 60 million active users. Regardless of the share price slump impacting the industry, the operating and net income, Total Asset are all on the upside for FY21.
4. Netflix (NFLX) -67.33% YTD LOSS
- Market cap: $86.72B
- Current price: $195.19
Perhaps the most popular subscription streaming media device and the market leader in streaming is Netflix. Although criticized for its greed in increasing subscriptions, it still stands above other market contenders like Disney +, Amazon Prime, HBO Max, Hulu, and Apple TV.
Netflix is deemed a good buy right now, given it’s heavily discounted. It is like buying it today for what it sold for in December 2017 ($191.96).
We believe Netflix is a discounted stock that will bounce back sooner after this bear market is over.
5. Facebook (Meta) (FB) -42.36% YTD LOSS
- Market cap: $528.08B
- Current price: $195.13
When social media is the topic, Facebook is the mammoth. With 2.94 billion monthly users, this social media platform cannot be easily replaced by its rivals. As you may know, Facebook in substance includes Instagram and WhatsApp. The last time its share price was this low was Dec 2019. It comes across as a good bargain in the current climate.
6. Shopify (SHOP) -70.54% YTD LOSS
- Market cap: $55.37B
- Current price: $457.33
Coming with bent knees as the highest e-commerce website in the world is Shopify, which has lost 70% value in its share price for reasons beyond missing targets. Shopify has fallen lower than its valuation in 2019 before the pandemic and is in a terrible state, soft enough to scream ‘buy me NOW.’ Shopify is a heavily discounted stock trading below its pre-pandemic numbers.
7. UI Path (PATH) -61.64% YTD LOSS
- Market cap: $9.17B
- Current price: $16.83
UiPath is a software company building robotics process automation. Away from its technicalities, a significant cause is that UiPath is a Romanian company impacted by the Russia-Ukraine war and the strengthening value of the USD (lately).
What happens when shares are issued at a discount?
When shares are issued at a discount, it means that the company is offering its shares to investors at a price lower than the current market value.
This can happen through a variety of mechanisms, such as a rights offering, private placement, or other forms of equity financing.
Here are some key points to understand about shares issued at a discount:
- Dilution: Issuing shares at a discount can result in a dilution of existing shareholders’ ownership in the company. Dilution occurs because when new shares are issued at a lower price, the total number of outstanding shares increases, reducing the percentage ownership of existing shareholders.
- Attracting Investors: Companies may issue shares at a discount to attract investors and raise capital more easily. By offering shares at a lower price, the company may entice investors who see the opportunity for potential gains when the share price appreciates.
- Regulatory Considerations: The issuance of shares at a discount may be subject to regulatory requirements and restrictions imposed by the jurisdiction where the company is listed.
- Financial Implications: Issuing shares at a discount can impact the company’s financials. While it provides an injection of capital, the dilution of ownership may reduce earnings per share and potentially impact the stock price.
- Investor Perception: The issuance of shares at a discount can influence investor perception of the company’s financial health and prospects. Investors may interpret the discount as a sign of financial difficulties or weakness in the company, potentially affecting market sentiment.
It’s important to note that the specific implications of shares issued at a discount can vary depending on the context and the terms of the offering.
As such, you need to review the company’s disclosures, consult with a financial advisor, or examine the relevant regulatory filings to understand the specific details and implications of a discounted share issuance.
Why do companies issue shares at a discount?
Companies may choose to issue shares at a discount for various reasons, including:
- Capital Raising: One of the primary reasons for issuing shares at a discount is to raise capital. By offering shares at a lower price, companies can attract more investors and potentially raise funds more quickly.
- Attracting Investors: Issuing shares at a discount can be a strategy to entice new investors or existing shareholders to participate in the offering. The lower price may be seen as an opportunity for investors to acquire shares at a bargain and potentially benefit from future price appreciation.
- Financial Distress: Companies in financial distress or facing liquidity challenges may resort to issuing shares at a discount as a means of quickly raising capital to address their immediate financial needs.
- Regulatory Compliance: In some cases, issuing shares at a discount may be a requirement imposed by regulatory authorities or stock exchanges.
- Strategic Partnerships or Acquisitions: When companies engage in strategic partnerships or acquisitions, they may issue shares at a discount as part of the deal structure. This can be done to incentivize the other party to participate in the transaction or to align the interests of both entities.
The specific reasons for issuing shares at a discount can vary depending on the company’s circumstances, financial needs, and strategic objectives.
Should I buy discounted stocks?
Deciding whether to buy discounted stocks is a complex decision that depends on various factors, including your investment goals, risk tolerance, financial situation, and the specific details of the discounted stocks in question.
Here are some considerations to help you make an informed decision:
- Research and Analysis: Before investing in discounted stocks, it is crucial to conduct thorough research and analysis. Evaluate the company’s financial health, industry prospects, competitive position, and the reasons behind the stock discount. Assess whether the discount is justified or if it presents an opportunity for potential price appreciation.
- Risk Assessment: Discounted stocks can carry higher risks. The discounted price may reflect underlying issues or uncertainties surrounding the company. Assess the risk factors associated with the stock, including the company’s financial performance, market conditions, regulatory environment, and competitive landscape. Consider the potential downside risks and whether you are comfortable taking on those risks.
- Diversification: It is advisable to maintain a diversified investment portfolio to spread the risk across different stocks, sectors, and asset classes. By diversifying, you can potentially mitigate the impact of any single investment’s performance. Evaluate how adding discounted stocks aligns with your overall portfolio diversification strategy.
- Long-Term Perspective: Investing in discounted stocks often requires a long-term perspective. It may take time for the stock price to recover or for the company’s underlying fundamentals to improve. Consider your investment horizon and whether you are willing to hold the stock for an extended period, potentially weathering short-term volatility.
- Professional Advice: If you are uncertain about investing in discounted stocks or lack the expertise to conduct a detailed analysis, consider seeking guidance from a financial advisor or investment professional.
- Financial Situation: Assess your own financial situation and ensure that investing in discounted stocks aligns with your overall financial goals, liquidity needs, and risk tolerance. It is important to invest within your means and avoid taking unnecessary risks that could negatively impact your financial stability.
Overall, investing in stocks, including discounted stocks, carries inherent risks, and there are no guarantees of returns.
The decision to buy discounted stocks should be based on a comprehensive evaluation of various factors and aligned with your investment strategy and risk tolerance.
For similar posts on the stock market, visit 2022 Crypto Wallet: Surprise Top Gainers and (no) Losers – Financial Ox
Also, a good read will be: Stock and shares: 5 Top Picks for new investors in 2022 – Financial Ox
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