3 Top Growth Stocks That Just Went on Sale
Market volatility is back, and that means good stocks are going on sale. While no one likes losing money in the short term, investors who have a sizable amount of time left before they retire actually benefit from sell-offs. This is because they are likely to be net buyers of stock in the future, not net sellers.
With that, we asked some of our contributors which growth stocks looked like worthwhile buys now. They reached inside the bargain bin and pulled out Universal Display (NASDAQ:OLED), Virgin Galactic (NYSE:SPCE), and Niu Technologies (NASDAQ:NIU).
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OLED technology remains the future
Lee Samaha (Universal Display): It often makes sense to buy long-term growth stories after the market overreacts to some “negative” news flow. Of course, it is easy to write that; it’s a lot harder to accurately ascertain when such a situation occurs.
Still, I think there’s an excellent case for buying stock in OLED research and technology company Universal Display. The company operates in some highly volatile markets, and its earnings are largely dictated by the production schedules of its end market customers. Those customers are mainly mobile phone, TV, and lighting manufacturers, which include the likes of Samsung, LG Display, Sharp, and Konica Minolta.
Herein lies the problem. It’s no secret that there’s a global semiconductor shortage, and that’s impacting the production plans of Universal Display’s customers. As such, the market was left disappointed by management’s guidance in the recent earnings presentations.
In an environment where many industrially focused companies have raised guidance, it was somewhat disappointing to see the OLED technology company merely maintain it, even as the first half came in generally ahead of expectations.
That said, it’s never a good idea to be overly focused on earnings in one or two quarters when you are investing in a long-term growth stock. And the case for buying Universal Display is based on a long-term secular shift toward using more efficient OLED technology instead of, say, LED. Moreover, it’s a transition that’s likely to accelerate as the cost of OLEDs falls and they become commercially available on an increasing number of mobile phones, laptops, watches, and TVs. As such, Universal Display remains an attractive stock for investors.
A bumpy but potentially worthwhile ride
Daniel Foelber (Virgin Galactic): If an investor bought shares of space tourism company Virgin Galactic at the end of 2020, closed their eyes, and checked the stock price today, they would notice little change. But one look at the chart, and it’s easy to see just how severe the volatility has been.
Shares of Virgin Galactic have been all over the place this year, briefly surpassing $60 per share in early February and dipping below $15 per share in mid-May.
Virgin Galactic’s future hinges on its ability to successfully develop and scale its…
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