During the pandemic, we saw some of the most vigorous equities growth since the 1920s. A great number of companies had their valuation treble, quadruple or increase even more over a period of mere weeks. The last 10 months, on the other hand, have been a bloodbath on the tech indices. Now, many of the darlings of 2021, having been brought back down to Earth with a bang, have lost up to and beyond 90% of their value since November 2021.
But wherever there is panic and confusion, there is also potential opportunity. As Baron Rothschild put it: "the time to buy is when there's blood in the streets". So, which quality assets are currently on sale, and where can we find them? Let's take a look at Libertex's Top 5 CFD Bargains of 2022 and see!
Our first nomination is a stock that made more than a few headlines during the pandemic boom. This cloud-based software company is known for providing customer relationship management software and applications focused on sales, customer service, marketing automation, analytics and app development. Of course, these areas were of special import during the lockdowns and the Work From Home revolution and that 'new normal' definitely contributed to the overexuberance that saw the company's share price double to over $300 in the space of a year. But now that it has crashed back by almost exactly 50% to $156.90, many people question whether this might be a bit too large of a correction for a firm at the forefront of their segment and with visibly strong macro tailwinds, such as the projected growth of distance working as a way of life and the trend towards automation of many sales roles in the future.
This household name has successfully managed to cement its position as the world's go-to streaming service, which takes some serious doing. VOD was naturally another industry that benefited massively from the coronavirus pandemic, and perhaps the unbridled optimism of many buyers helped create a bubble that inevitably burst once reality set in. NFLX is currently down about 65% from its November 2021 all-time high and is trading at around $227 at the time of writing on September 9. Amid hot competition from the likes of Amazon Prime and Disney squeezing subscriptions, the original streaming service has invested huge capital into developing its own studio arm. With the associated influx of top-tier original content, Netflix will be able to reduce its royalties costs over the long-term while also being able to offer consumers exclusive movies and series that will likely boost membership figures over time. Gains are unlikely to be as spectacular as they were in 2020-21, but stable growth rarely is.
3. Tencent Holdings
Any list of knockdown stocks wouldn't be complete without at least one entrant from China. The world's second-biggest economy has suffered greatly both as a result of the zero-COVID policies of the country's leadership as well as from the knock-on effects of reduced global durable goods demand and rising raw materials costs. Tencent Holdings is generally referred to as 'The Chinese Google', but the 25-year-old tech giant is much more than just a copycat. Apart from its core QQ and WeChat social media apps, the company is involved in music streaming, web portals, e-commerce, technology, internet services, payment systems, smartphones and even gaming. This Hong Kong-based stock is now trading at HK$ 307, down from an all-time high of HK$757 in February 2021. That represents an almost 60% discount on this recent peak. In fact, Tencent is currently trading at a lower price than it was 5 years ago in September 2017. Considering how much growth it has experienced since then and how much room it has to expand in both China and the rest of Southeast Asia, many feel as though this current level is more than fair value for such a prolific and future-proof business.
Outside of the tech sector, there weren't many sectors that experienced a comparable level of growth over the pandemic period as trading and investing. Young people all over the world took their government stimulus checks and furlough payments and decided to put them to work for them. And where did most of them turn? Robinhood. So, when the online trading and investing platform finally went public in 2021, interest and hubris were so high that the quite high IPO price of $35 was quickly driven up to nearer $60. Over the ensuing months, however, the hype surrounding the company quickly faded, and many investors realised that the initial multi-billion-dollar valuation was probably a bit too ambitious. Then, tech stocks began to crash hard, and this saw millions of capital flow out of the platform over a short period. At its current price of $10.35 (over 80% down from its all-time high), Robinhood looks like a solid investment for the years ahead. After all, it remains the front-of-mind option for US-based retail investors, and that has to count for something.
1. Marathon Digital Holdings Inc.
It's unsurprising to see a crypto-themed instrument topping the list, given the huge declines in digital assets this year. But Marathon Digital Holdings is not any old cryptocurrency miner. With a market cap of $4.2 billion, the company accounts for over a quarter of the value of the entire crypto-mining industry. Marathon has pledged to have 23.3 EH/s hashrate capacity installed by early 2023, which would dwarf the planned 8.6 EH/s upgrade of its closest competitor, RIOT Blockchain. If we accept that cryptocurrencies and the blockchain are here to stay, then it's clear that Marathon Digital Holdings is a strong and stable miner play over the long term. As is the case with any market crash, the crypto bust has dragged down not only the chaff but also the wheat. After plummeting nearly 90% from its all-time highs, MARA currently sits at $13.26 but enjoyed two consecutive double-digit growth days last week. Some are calling this a sign that the reversal is already underway.