Market volatility and fear may still be elevated, and might be scaring some away from this market. But for long-term investors, that’s more likely a gift. That’s because market pullbacks tend to bring down nearly all companies.
And that creates opportunities to buy great companies at a reasonable price. That even includes some of the big tech companies that have been responsible for the market’s outperformance over the past few years.
Among the Magnificent Seven players, Alphabet, parent of Google (GOOG), has been one of the poorer performers, sinking 7% over the past year.
But their recent earnings beat by 34%, their AI business is growing, and Google still sports an impressive 31% profit margin. Continued high margins should continue to win out for Google over time.
Plus, with shares currently trading at 18 times forward earnings, it’s one of the better valuations in the big-cap tech space today.
Action to take: Long-term investors may want to build a stake in Google now, and use further market fears to add to that position. Google is also increasing its share buyback and dividend program, which should help boost returns over time.
For traders, shares have started to trend higher after the recent market selloff. The July $180 calls, last trading for about $3.75, could see mid-double-digit returns or better if shares continue the recent trend higher.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.