Times have been tough for stocks in the last several days. Stocks traded down sharply on Thursday after hawkish minutes from last month’s Fed meeting confirmed the assumption that there will be more rate hikes in the near term.
The S&P 500 was down 1.4% on Thursday, and sank another 1% on Friday. The Dow has fallen in in eight of the last 12 trading sessions. And many fear more downside is on the horizon.
Some stocks, of course, had a more harrowing week than others. Advanced Micro Devices (NASDAQ: AMD) has sunk more than 10% in the last week, and almost 24% in the last month, and FedEx (NYSE: FDX) is down more than 11% in the last month.
But as stocks have fallen, some have gone into bargain territory, the following three stocks among them. Here’s what you need to know about these three stocks.
Celgene (NASDAQ: CELG)
Biotechs usually trade at frothy valuations, and it isn’t often that you find one in the bargain bin. But Celgene (NASDAQ: CELG), which is down nearly 40% in the last year, is one such biotech that has slipped into bargain territory as the market under appreciates its pipeline and has overreacted to some of the issues the company has come up against recently.
Late last year, Celgene’s GED-0301 Crohn’s disease treatment failed massively in late-stage clinical trials which sank the stock. And then in March, $6 billion was wiped off the company’s market cap after the FDA refused to review the biotech’s new multiple sclerosis (MS) treatment, ozanimod. But despite this setback, the drug is expected to ultimately win approval for treating the disease.
In addition to the upcoming approval of ozanimod, Celgene’s drug candidate luspatercept, a treatment for myelodysplastic syndromes (MDS) and beta-thalassemia, is in late stage trials and is looking like a strong potential winner. And not only that, the company has also picked up a few drugs through recent acquisitions, including fedratinib, a treatment for melfibrosis from Impact Biosciences, and Juno Therapeutics’ liso-cel CAR-T therapy.
Celgene’s blood cancer treatment Revlimid currently accounts for 64% of sales, which has put many investors off. But Revlimid doesn’t have any legitimate competitive threats until at least 2023, and the addition of the new drugs discussed above could prove to take some of the pressure off Revlimid.
With revenues and earnings expected to grow by double digits both this year and next, it’s no wonder why the average analyst 12-month price target is nearly 47% higher than today’s price at $120.84.
International Game Technology (NYSE: IGT)
The casino and gaming industry has taken a beating this year, and International Game Technology (NYSE: IGT) has been hit hard. The stock is down almost 38% so far this year after a few disappointing earnings reports.
IGT provides the betting infrastructure in casinos. It powers MGM’s (NYSE: MGM) playMGM app for sports betting and offers a range of slot machines. Deutsche Bank is bullish on the stock as it says the feedback from casinos on the company’s new slot machine have been positive.
“Operators noted… specifically the product coming from the legacy Tech studios, has played very well, which has helped IGT drive increasing ship share in casino-operator-purchased video product in 2018,” Deutsche Bank said in a note.
The investment firm has issued a Buy rating on IGT with a price target of $35 – 110.8% higher than the price as of this writing. The average price target for the stock is $28.79, suggesting possible upside of 73.4% over the next twelve months.
Lam Research (NASDAQ: LRCX)
Tech stocks have been some of the hardest hit recently, and this stock has been no exception – though maybe it should have been.
Lam Research (NASDAQ: LRCX) is in the semiconductor space, but it isn’t a chip maker. Instead, the company makes the machines that make the chips.
The stock has been beaten up this year and is down nearly 30% in the last 12 months, and nearly 7% in the last month alone. But the market may be being a bit tough on the stock. The company is growing quickly, has high margins and recurring revenues, and has a strong return on invested capital.
Lam Research has been returning at least 50% of its free cash flow through buybacks, and has grown its dividend by 120%, giving investors a yield of 2.5%
Analysts’ average 12 month price target for LRCX is $229.85, indicating possible upside of 58.3%. Earlier this week, Stifel Nicolaus rated the stock a Buy and set a price target of $279 – 92% above Friday’s closing price.