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.
