Traders Say There Is A Buying Opportunity In These 6 Stocks Now

There’s untapped potential in these 6 stocks and traders say now is the time to buy. Here’s why.

Both the Dow and S&P 500 hit fresh records on Wednesday after the Fed left interest rates unchanged even as the economic rebound heats up. 

Not all major indexes are near all-time highs, however. As of Thursday’s close, the Nasdaq is down around 7% from its high set last month as tech stocks remain under pressure as the U.S. 10-year Treasury yield climbs to its highest level seen since January 2020, and as the market rotates into value trades in anticipation of rising inflation.

But the recent underperformance in tech may be a buying opportunity.

New Street Advisors Group CEO and lead advisor Delano Saporu said this week that if yields continue to rise, tech stocks will likely see “near-term pressure as the market tries to figure out what’s next.”

“Long term, we’ll be in a good position,” Saporu said. “So, if you’re a long-term investor, this is an opportunity to kind of get in at lower valuations and I think long term, we’ll see the tech plays rise higher.”

More specifically, Saporu likes Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT), both of which are down over the last month by nearly 5% and 3%, respectively.

Joule Financial’s Quint Tatro has two other tech stocks in mind now. 

“We would be a buyer of specifically Facebook (NASDAQ: FB), but also Google (NASDAQ: GOOGL, GOOG) as sort of a reopening play and a play on advertising as small businesses look to really regenerate that growth and really stock those storefronts,” Tatro, Joule’s chief investment officer, said. 

“For the first time in a long time, this is a stock picker’s market,” Tatro added.

Tech isn’t the only area of the market with opportunity now. Tatro said that “there’s unbelievable opportunity to pinpoint other sectors and stocks.”

“I really think that investors need to look into a little-known sector that we’ve really lost sight of until recently,” Tatro continued, “and that’s the materials.”

The materials sector has been rising higher lately, with the XLB S&P 500 Materials Sector ETF gaining more than 6% over the last month, and nearly 9% so far this year. 

“Specifically, I think the industrial metals are very, very interesting here,” Tatro said. “We really like some of the steel plays: Commercial Metals (NYSE: CMC) as well as Reliance Steel (NYSE: RS). These are names that have exceptional upside earnings here in the coming years, especially with… the sort of reflation and global growth story back on track, and they have exceptional balance sheets and they’re selling at real value.”

Both stocks have been on the rise this year as the global economy reopens, with Commercial Metals up 38% year-to-date, and Reliance Steel up 25% since the start of the year.