I won’t mince words here. For long-term investors, the current tech market selloff offers one of the greatest buying opportunities I have ever seen in my investing career.
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Seriously — I mean that.
Now, as you know, I’m a growth investor. But I’m not your typical growth investor. I didn’t become TipRank’s No. 1 stock picker in 2020 by chasing momentum, as many growth investors do. Rather, I did it by buying dips in long-term winners.
That’s the best way to create long-term wealth in markets. Find great stocks with solid growth prospects, and buy them on big dips.
I told folks to do that in 2014 with Facebook (NASDAQ:FB) after investors questioned the WhatsApp acquisition and stocks were reeling. The stock is up more than 400% since then.
In 2015, I told investors to buy the dip in Advanced Micro Devices (NASDAQ:AMD). And in 2016, I had “buy-the-dip” calls on Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL). In 2017, it was Axon (NASDAQ:AXON), Shopify (NYSE:SHOP) and Match (NASDAQ:MTCH). Then in 2018, it was The Trade Desk (NASDAQ:TTD). In 2019, it was Roku (NASDAQ:ROKU), Plug Power (NASDAQ:PLUG) and Nio (NYSE:NIO). And in 2020, we had Spotify (NYSE:SPOT), Snap (NYSE:SNAP) and Pinterest (NYSE:PINS).
You get the picture. My investing career has been defined by successfully buying the dips in long-term winners.
And guess what we have right now? The most compelling, most buyable dip in long-term winners that I’ve ever seen.
That’s because I have never seen such a large gap between business fundamentals and stock prices than what I’m seeing right now in hypergrowth tech stocks.
Consider This
The business fundamentals underlying technological disruption have never been stronger.
Simply consider:
- In December 2021, electric vehicle (EV) sales outnumbered diesel car sales in Europe in for the first time ever. And with dozens of new EV models set to launch in 2022, global EV sales are projected to rise about 60% this year, per BloombergNEF.
- An autonomous trucking startup just last month completed the world’s first-ever test drive of a fully self-driving truck — without any driver or passenger in the car — on busy highways and streets in Arizona.
- Solar energy installations grew by 33% year-over-year in the third quarter of 2021 and are expected to rise another near 40% in 2022, according to the U.S. Energy Information Administration.
- S. utility-scale battery storage capacity is expected to grow by 84% in 2022, according to the U.S. EIA, and BloombergNEF predicts that the global energy storage market will grow 20X between 2020 and 2030.
- Digital ad spending rose 29% in 2021 and is expected to rise another 16% in 2022 — led by enormous growth in connected TV advertising, which rose 60% in 2021 and is expected to rise another 32% in 2022, according to eMarketer.
- Also according to eMarketer, global e-commerce sales rose 17% last year and are expected to rise 13% this year and 11% in 2023 — to more than 22% of total retail sales.
- IT spending budgets are expected to increase more this year than any other year over the past 10 years after a record IT spending year in 2021, according to a Gartner survey of over 2,000 CIOs and technology executives.
- Virgin Galactic (NYSE:SPCE), SpaceX, Planet Labs (NYSE:PL), Virgin Orbit (NASDAQ:VORB), Blue Origin and many others successfully launched rockets, satellites and people into space over the past 12 months, with many more launches due in 2022.
- A gene-editing company completed the first-ever in-vitro human gene edit in 2021, marking arguably the biggest breakthrough in that industry since the launch of CRISPR.
- Non-fungible token (NFT) sales volume soared more than 250X year-over-year in 2021 to $24.9 billion.
The list goes on and on. Across the board, new technologies continue to disrupt our personal and professional lives at an accelerating rate. The fundamentals underlying the companies behind all of this technological disruption have never been better.
And yet for many of them, their stock prices have never been lower.
Fundamentally Out-Of-Touch
It’s a massive disconnect. I put together a chart that quantifies how out-of-touch some hypergrowth tech stocks currently are with their underlying fundamentals.
Yesterday, I sent the chart to subscribers of my flagship investment research product, Innovation Investor.
It includes my top 10 highest-conviction, long-term growth stocks in the market today, comparing their stock prices to our internal one-year price targets. All this is based on our 10-year earnings per share (EPS) and discounted cash flow (DCF) models, the consensus analyst price targets on those stocks and the Morningstar fair value estimates. In other words, it compares the current prices of those top-10 stocks to a variety of fundamentally derived price targets.
The results, folks, are stunning!
Our price targets indicate average 12-month upside potential across these 10 stocks of nearly 300%. The analyst price targets imply a 12-month average return of 125%. And the always super-conservative Morningstar targets imply a 12-month average return of nearly 80%. Across all these targets, the implied 12-month upside potential is about 165%.
Now, I’ve blocked out the specific names, prices and price targets of these specific stocks — but you get the point.
Take This Opportunity
Buying these stocks today represents arguably the greatest investment opportunity I’ve ever come across in my investing career.
Could they drop over the next few weeks amid broader market volatility? Absolutely! But will they rocket hundreds of percent higher over the next 12 months — and thousands of percent higher over the next five to 10 years? You bet!
So if you want to know the names of these 10 “Strong Buy” tech stocks, how about this. Just click here, and I’ll give you one of the names — the stock with an average price target upside of 265% — for free!
If you watch until the end, you’ll give yourself an opportunity to find out the names of all 10 of these tech stocks to buy now.
Trust me. I’ve made a career out of buying the dip in long-term growth stocks — and today’s opportunity is the best I’ve ever seen.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
