With the stock market in the throes of a bear pullback, many are looking to history as a guide for when the bear will end. While the answer varies, chances are stocks will remain weak for a few more weeks and even months as economic data continues to come in.
That said, investors who start accumulating shares of great companies, particularly industry-leading companies, will end up with a strong portfolio performance on the market’s next rally higher.
Among the big tech players, a number of top companies bear focus for investors looking for a long-term rebound now. One such name is Advanced Micro Devices (AMD).
The company continues to get strong analyst backing, and the company appears to be in strong shape. Revenue is up 71 percent in the past year, and earnings surged 42 percent. Shares are now flat over the past year, following a strong outperformance during the past market rally.
Action to take: Shares now trade for under 20 times earnings. Combined with the company’s growth and strong, cash-rich balance sheet, and there are plenty of reasons for shares to trade higher when the current market fears end. The company does not yet pay a dividend.
For traders, the November $100 calls, last going for about $6.10, offer the potential for mid-to-high double-digit returns in the coming months. Traders may want to scale into the trade on down days, and look to take shorter-term profits when rallies occur.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.