The market’s recent pullback offers a strategic window of opportunity for savvy investors. As the Nasdaq retreats below its 21-day moving average, and the S&P 500 approaches the same key trendline, patient investors can scout for surging potential amidst the current price diminishment. This correction provides a compelling moment to explore potential value in the stock market.

Riding the Market Oscillation

The recent red wave has driven the Nasdaq from overbought RSI levels in late December to a position below neutral. Historically, key moving averages such as the 21-day, 50-day, and 200-day have proven to be the level at which stock indexes tend to pivot, making it crucial to monitor how the Nasdaq and the S&P 500 interact with these levels in the current market oscillation.

Fiserv, Inc.: A Thriving Underdog

Fiserv, Inc. (FI) may not be a household name, but it plays a vital role as one of the preeminent financial services companies in the United States, serving as the driving force behind backend payment processing, money transfer technology, and an array of financial services utilized by a multitude of top-tier institutions.

Zacks Investment Research

Image Source: Zacks Investment Research

Fiserv has exhibited steady expansion and experienced substantial revenue and earnings growth after a major acquisition in 2019, propelling it forward in the rapidly evolving payments and financial services landscape.

Reaping Rewards from Resilience

Zacks estimates project an 8% revenue growth for Fiserv in the fiscal years 2023 and 2024, bringing it close to a $20 billion milestone. Notably, the company is expected to achieve a 15% and 14% increase in adjusted earnings over the same period, reflecting an encouraging upward trajectory. With nearly 70% of brokerage recommendations indicating “Strong Buys” or “Buys,” and zero sells, Fiserv is stamped with a Zacks Rank #2 (Buy). The company’s shares have surged more than 1,300% over the past two decades, maintaining an upward trajectory against broader indexes.

META’s Deceptive Value

Meta Platforms, Inc. (META) stands out as a company that may not immediately scream “value stock” despite an impressive 170% surge over the last 12 months. As the parent company of Facebook, Instagram, and WhatsApp, it currently trades at a 7% discount to the Zacks tech sector, showing surprising signs of latent value. Notably, Meta trades at a 67% markdown from its 10-year highs and retains an appealing PEG ratio of 1.1, a sharp contrast to the broader tech sector. While approaching its 21-day trendline, Meta’s strong focus on profitability positions it to potentially yield substantial returns, with a projected 46% growth in adjusted earnings in 2023.

Riding the Market Oscillation

While operating in a market adroitly characterized by short-term fluctuations, both Fiserv and Meta are resiliently positioned to weather the storm, potentially offering attractive entry points to investors aiming to capitalize on the latent value of these tech juggernauts.

Meta Shows Steady Growth Despite Market Concerns

Despite concerns about slowing ad spending and the growing saturation of Facebook, Instagram, and WhatsApp, Meta grew its daily active user (people) base by 7% last quarter to a mind-blowing 3.14 billion. Meanwhile, its monthly active users popped 7% to 3.96 billion.

The company’s various apps focused on different niches of social media and digital communication attract advertisers clamoring to reach the massive user base in a world where people are glued to their phones. All of this means that Mark Zuckerberg’s metaverse bet doesn’t have to pay off anytime soon—if ever. And Meta’s balance sheet remains robust. 

Impressive User Growth Defies Market Fears

Meta, formerly known as Facebook, managed to defy market concerns about a slowdown in ad spending and the perceived saturation of its major platforms. The company revealed a staggering 7% increase in its daily active user base, which now stands at a whopping 3.14 billion. Furthermore, the monthly active users also saw a commendable 7% rise to reach 3.96 billion. This growth flies in the face of worries about the company’s user engagement and market saturation.

Meta’s Diversified App Portfolio Attracts Advertisers

In a world where people are inseparable from their smartphones, Meta’s suite of apps catering to different segments of social media and digital communication continues to lure advertisers who are eager to tap into its colossal user base. This diverse range of platforms and services has essentially afforded Mark Zuckerberg’s metaverse ambitions with a cushion, creating an environment where immediate success is not obligatory, if at all feasible. Despite the ongoing skepticism and apprehension, Meta’s financial footing remains robust and unwavering.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.