It has been a deplorable start to the year for the stock market. Leading indices such as the S&P 500 are down by more than 20%. The stock selloff intensified with the expected bump in interest rates during last week’s Federal Reserve meeting. Savvy investors will look beyond the carnage find undervalued stocks they could pick for the long haul.
With the current market downturn, many investors are looking too closely at the broader stock market. Such a strategy is unwise, considering how good quality companies are likely to grow regardless of the current market conditions. For example, plenty of Nasdaq stocks are trading at multi-year lows and would make for incredible long-term bets at this time. As such, investors should stop fixating on the broader market and look for high-quality companies trading at huge bargains.
Here are seven high-quality Nasdaq stocks you could pick up for $250.
Sirius XM (SIRI)
Radio giant Sirius XM (NASDAQ:SIRI) has been a consistent performer in its niche. Its 5-year average revenue and EBITDA growth of 12.30% and 8.60%, respectively, help demonstrate this success. However, it faces some near-term headwinds, with the auto industry struggling from a parts crisis. Nevertheless, its long-term positioning remains attractive.
A couple of growth catalysts are driving the company’s bull case. The first is its music streaming service in Pandora, which averaged over 50 million users during the first quarter. Since its acquisition in 2019, it has been on a downward spiral, but its expansion into podcasting might be a big deal down the line. Top comedian Conan O’Brien’s podcasting company was acquired by SiriusXM recently, which could be the start of something big.
Moreover, there’s also SiriusXM’s 360L service that effectively combines satellite and streaming. Roughly 4 million cars have the service enabled, and new cars will be enabling the modules at a brisk pace in the future. Hence, there’s plenty to be excited about with SIRI stock for the future.
Lucid Group (LCID)
Up-and-coming luxury electric vehicle maker Lucid Group (NASDAQ:LCID) came out with a highly encouraging first-quarter report. It reported a healthy increase in reservations and re-iterated its target to produce 12,000 to 14,000 cars this year.
Furthermore, we saw Lucid generating $57.7 million in sales from just 360 vehicle deliveries, comfortably surpassing analyst expectations. Moreover, its net loss narrowed by 97.2% to $81.3 million. Hence, its net loss of 5 cents per share exceeded analyst estimates by almost 30 cents.
The total reservation count climbed to a whopping 30,000 compared to 13,000 last September. The massive increase shows that Lucid’s EVs are gaining plenty of traction in its target market. These reservations could potentially generate almost $3 billion in sales.
CSX Corporation (CSX)
CSX Corporation (NASDAQ:CSX) is one of the largest railroad operators in America. It operates in virtually every economic area in the East. Over the years, it has proven to be an inflation-resistant business, rewarding its shareholders with vigorous dividend payouts and buybacks due to its robust cash flow generation.
Its first-quarter results show resilience in the face of rising fuel costs and supply chain hiccups. Revenues rose 21%, with fuel surcharges and fuel price gains compensating for higher costs. Moreover, the company also acquired regional operator Pan Am Railways to expand its footprint in New England.
Additionally, trucking revenue became part of CSX’s results for the first time after the acquisition of trucking company Quality Carriers. Trucking sales account for just 7% of CSX’s total revenues, but could grow over time. CSX stock trades at under 4.5 times sales, which is significantly lower than its five-year average, adding to its attractiveness.
Comcast’s (NASDAQ:CMCSA) highly diversified revenue stream has helped mitigate the macro-economic risks at this time. It recently reported its first-quarter results, where sales shot up by 14%, while group EBITDA came in over 8.8% from the prior year. Despite the skepticism surrounding the cable business, it yet again delivered during the quarter with 194,000 new net additions.
Moreover, NBCUniversal also saw a considerable bump in sales due to the Super Bowl and the Winter Olympics. Additionally, movie studio ticket sales were up, and theme park attendance made a big comeback.
Overall its results were solid across all business segments, and its profitability is rising despite the competition. Its dividend profile is also in the spotlight, with a robust 2.7% yield and close to five years of growth in payouts.
EBay (NASDAQ:EBAY) is a leading online marketplace giant coming off a tremendous 2021. However, it’s going through a major hangover, which has led to a slowdown in organic sales growth. Due to multiple factors, the business will likely suffer in the interim; however, its long-term outlook looks incredibly bright.
A lot has to do with the platform’s penchant to innovate and move into high-value niches, such as collectibles, sneakers and trading cards. Moreover, it also aims to generate strong sales from advertising and payment processing.
Its asset-light business enables it to generate truckloads of cash from its relatively small revenue base. It sees revenue growth returning in 2023, while it pushes the afterburners in 2024. Margins are likely to expand over time, in line with the increase in sales.
Cisco Systems (CSCO)
Cisco Systems (NASDAQ:CSCO) has been a leading tech utility that operates a boring yet beautiful cash-rich business with an impeccable dividend profile. Its switching solution and routers have become ubiquitous over time, helping the business generate truck-loads of cash over time. It has expanded into other profitable verticals, including network security, application experiences, the internet for the future and related areas.
Moreover, it plans to shift to a subscription-based business model that has entwined the company with its growing customer base. Subscription sales account for 44% of total revenues and are now the fastest-growing part of the business. Looking ahead, Cisco predicts its annual sales to grow at an annual growth rate of 5% to 7% from fiscal 2021 and 2025, including a similar effect on its adjusted earnings-per-share.
In other words, its higher-margin subscription service will play a huge role in enabling Cisco to achieve its future objectives.
Marvell Technology (MRVL)
Chip-maker Marvell Technology (NASDAQ:MRVL) is flying high after posting stellar first-quarter results. Its revenues jumped 74% year-over-year to a record $1.45 billion, primarily due to stronger-than-expected performance from data centers. Moreover, 88% of its sales came from the data infrastructure end market, witnessing robust demand from 5G wireless networks, cloud computing and other areas. It also reported a strong increase in its bottom line, where non-GAAP earnings came in at 52 cents compared to 29 cents in the prior-year period.
Marvell’s data center business has been a key growth driver, where sales increased 131% on a year-over-year basis. The demand for its chips is growing at a staggering pace to support faster connectivity. Also, it’s winning big in the 5G wireless infrastructure niche, where revenues increased 50% to $252 million in the last quarter. To top things off, the company expects sales to rise 41% from the prior-year period to $1.51 billion in the second quarter.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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