Investors don’t need to get caught in a trap between a growth stock or a value stock. In a bear market, many fast-growing companies can have their valuation knocked down until they’re a potential bargain. That gives investors the best of both worlds – a reasonable value, with some upside when the market recovers.
Right now, a number of mid-sized companies fit the bill. The trick is to finding firms that are leading their industry while also still offering upside potential.
One such player in the banking industry is PNC Financial Services Group (PNC). The bank isn’t one of the major Wall Street banks, so it hasn’t been hurt as much by a slowdown in market activity. But it’s also growing reasonably for its size, with room to grow further.
Shares are now down about 20 percent off their 52-week high, even with earnings up over 35 percent in the past year. Plus, the company just increased its dividend payout by about 20 percent, for a 3.5 percent starting yield now.
Action to take: Investors can buy the company and enjoy growing dividend over time. That makes for a simple investment, particularly if there’s a further drop in shares in the coming weeks.
For traders, there may be some short-term pain in this market. But given the company’s strong operational performance, shares should head higher. The January 2023 $180 calls, last going for about $5.80, offer mid-double-digit returns. Traders may want to buy the options on a down day for shares, and flip on a strong rally day.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.