3 Stocks You’ll Wish You Bought During This Dip

We are in the middle of market mania. Stocks skyrocketing 500% a,000% in just the matter of a few weeks. Are you buying into the mania or are you looking at the stocks that are quiet right now for a real opportunity for growth? Joining us today is Jeff Clark with Tradesmith. And Jeff, this is your specialty. You like to look at stocks that are on the downtrend right now. The names that no one is talking about. They're not making headlines right now. And that is when you like to buy. It's a strategy that's worked really well for you. And so, Jeeoff, I know today you have a list for us of three names that are down near their lows that you think have a lot of potential. We'll share those names in a minute, but first I wanted to get your take on where the market is as a whole right now. It seems like even though we had a little bit of a pullback on Thursday and even more on Friday, we're still hovering near those all-time highs. Cheryl, it's an interesting setup because, you know, while the the broad indexes are all at all-time highs, there's a lot of sectors and a lot of stocks that are not participating in this. You know, we were talking before the show that the new low list yesterday was larger than the new high list, which is really an odd thing when the S&P 500 is, you know, making new all-time highs above 7,500. So I think on a broad perspective, we're probably due for a little bit of a pullback simply because when you have a a market that has gone up in such a narrow way, it's usually sort of a caution sign, a warning that we're probably overdue for at least a little bit of a pullback because those stocks have gotten, let's say, too enthusiastic. But at the same time, it's left so many stocks behind that as that money comes out of the hot stocks, it's got to find a home somewhere. And I I'm thinking it's going to find a home in some of the value names, some of the contrarian names. >> That is what we're going to look at today. We have three contrarian stocks that Jeff is recommending and to look at right now. And a couple of these are some names that uh we haven't talked about for a while on the show, but our investors have been very interested in in the past. So, I'm excited to get to these names, but I want to talk a little bit more about that narrow market that is reaching those all-time highs. It's really all the AI trade, the semiconductors, anything to do with the the AI story is seeing those huge gains right now. And we're hearing people talk about, well, if you look at the numbers, you look at the earnings, you look at the orders that are coming in, the backlogs that are coming in, there really is real money heading into the sector. So, is it an artificial inflation of these stocks, or is there real money? And are these stocks rising for a reason? >> Well, it's probably a little bit of both. You know, there there obviously is some real money coming behind that. The question is, how far out in time do you want to discount that real money? And how long is it going to continue? If I go out and I buy a new car, yeah, I've just spent, you know, $100,000 on a brand new car today and that dealer can say, "We've got $100,000 in income, but it's going to be a long time before I buy another car again." So, as all of that money is getting pushed into the AI sector and the whole buildout, you've got to wonder how long that is going to continue because once you've built a data center, you don't need another one right next to it. So, you have to weigh that. And I think maybe what's happening is the market is taking into perpetuity that this money is going to continue to be spent this long. It's probably not. You know, the memory stocks as a very good example, they are a commodity. They're a cyclical industry. And so, right now, we've we've taken all assumptions of cyclicality off the table. We were just expecting that these are going to continue going on forever. That's not going to happen. It's not realistic. So, I think things have gotten a little bit too enthusiastic. Yes, they're still relatively cheap uh based on their fundamentals, but usually that's when you get the peak in those particular names when they've reached a certain amount of relative cheapness and then you've got the the cycle goes the opposite way. So the market right now I think is discounting enthusiasm to infinity and that needs to come in a little bit that has to be checked. Yeah, there's the mindset of buy the stocks that are hot right now. Buy those stocks that have momentum, the momentum investing theory. And then there's the theory that you are talking about today, the way that you like to invest, and that is looking for more value stocks, looking at stocks that are maybe near lows that the rest of the market isn't looking at right now. How has the strategy worked for you? And and what about it makes it work? >> The way you get rich in the stock market, right, all the way back through time was buy low, sell high. That's it. And what's happening now is buy low, sell high isn't quite working because you can buy low and they get lower and lower and lower. And buy high and sell higher is the momentum trade which is working right now. Momentum trade can exist for a little while, but it's not the way you make money long-term over time in the market. Buy low, sell high is how you do that. Look at Warren Buffett. Look at any of the major hedge fund managers. Look at anybody who's made the real wealth investing in the market. They make the money by buying low, selling high. And so you don't have the opportunity in the hot stocks right now to buy them low. Maybe we'll get that opportunity later on this year. But right now, there are a lot of stocks that I think you do have that opportunity with. And I like the idea of buying them low. I like the idea of buying them even lower if we get a even more of a pullback. And one of the strategies I'd like to talk about today is a way that you can actually get paid now just for agreeing to buy stocks at a lower price. >> Yeah, we're going to talk about these three names that Jeff has for us today as a long-term investor and and when is a good time to get in on these names and whether they are good long-term investments. But I know Jeff is also uh specializes in options and that is one of the things we are going to talk about a little bit of how the strategy works for Jeff. I also know he has a brand new program that just launched that is all about training how to trade options for the first time. There's a 5-day challenge. It's called the Ironclad Challenge. It's a free way to look at learning options from Jeff and he actually trains his son in these videos. So it's a great way to learn how to do this for the first time. And Jeff, you are a great teacher. You can scan the QR code or follow the link in the description of this video to join that program, join that 5day challenge and and and learn about this a little bit deeper. But let's cover a little bit here, Jeff, and this video for our viewers of what is the strategy for options of getting paid to buy a stock uh at a certain price. >> Okay. Okay. Well, what I'm talking about is is what I consider to be the absolute best way to generate income in the stock market, and it is by selling uncovered put options on stocks that you want to buy at the prices at which you're willing to buy them. Now, when we talk about options, a lot of people think risk and they think um gambling and they, you know, put it all on the line and try to make big bucks with just a little bit. That's not what this strategy is designed for. This is an income generating strategy. So, for example, if you like the idea of buying IBM, let's say IBM's trading around what, $220 a share, and you like the idea of maybe buying it at 200. Now, you can wait for it to come down to 200, maybe you wait a little bit, or maybe the stock just rallies without you. Or you can agree to buy the stock at 200 by selling an uncovered put option with a strike price at 200. For that agreement, you get paid upfront and then if the stock is below 200 at the time the option expires, you will buy the stock at 200. You only sell uncovered put options on stocks that you want to own anyway. If you don't want to own IBM, you don't sell an uncovered put option on IBM because there's a chance that you will wind up owning IBM. So, when I look at the market right now and I I talk about these stocks that I think the market is due to a to have a little bit of a pullback, I put together my little shopping list and it's all these stocks that I want to buy and at what prices I want to buy them and they're all at lower levels than where they are right now. But as they approach those lower levels, I like the idea of selling an uncovered put option that gets me paid to buy that stock. So it's kind of like this, you know, let's say you go into Neiman Marcus and there's a sweater you're absolutely in love with, but the sweater is 100 bucks. Then gosh, if it ever went on sale for 90, I'd be willing to buy it. So you take the sweater up to the cashier. You say, "Look, if it goes on sale for 90 over the next month, I'll give you 90 bucks for it." And so the cashier sets the sweater aside, opens up the cash register, pulls out five bucks, and hands it to you. And then you walk away. month goes by, you come on back. If the sweater is at 90 or below, you're buying it for 90 and you keep your extra $5. If the sweater is above 90, you don't have to buy it. You keep the five bucks anyway, and then you can make the same deal again. So, it's it's a way of getting what you want to own anyway and getting paid to own it. It is, like I said, it's the most fantastic way to generate income in the market. because of the way the option structures are set up right now where you actually have weekly expiration on options, you can generate income every single week off of this. And it it's just like I said, it's the best way to generate income in the market. And we have examples of of folks relatively low risk making 25 30 40% per year using this sort of a strategy. >> You are so good at explaining this. That was a great analogy of making options easy to understand for someone who has not done it before. So thank you for sharing that. Let's get into these names. I think the most important point that you shared was that you have to want to own the stock anyway because there's a chance that you might. So that's these three names too. Whether you're interested in options or not, these are great stocks to look at right now on Jeff's list. So what's the first stock that you're looking at as a value play right now? >> Well, now when we say value play, let's put this in context. When I say they're value plays, they're not fundamentally cheap relative to the broad stock market, but they are fundamentally cheap relative to their own historic trading patterns. The three that I'm going to mention today are high growth, so you pay a little bit of a premium for them, but they're extreme values relative to where they were just a few months ago. We'll start with the first one, which is Figma, symbol is FIG. Now, this is a um an internet design company, if you will. Uh and I know it it gets caught up in the whole, you know, software is going to be destroyed by AI and all that sort of stuff. The last couple times I've been on your show, we've talked about software as an investable, contrarian trade, and it's paid off really well to do that. Figma is going to be one of the survivors because they incorporate a AI. They embrace AI and it's part of their whole process to help build the the digital websites or any digital type of imaging and so a a lot of the younger sets. My kids are using it, my kids friends are using it to build out web designs. Obviously, you know, institutions are using it as well. Figma reported earnings last night. Uh the stock is popping today as a result of it. But keep in mind, Figma came public last year at $33 a share. immediately shot to $120 a share. Frankly, it had no business being at $120. It has since come all the way back down and was trading at 20 yesterday. So, it's up a little bit today. I think it's around 22 or so as we're talking. I love this stock. I think this stock is going to be a huge survivor in the business, but I'm not willing to pay up for it. I am, however, willing to sell uncovered puts that give me the opportunity to buy it at 20. So, I like the idea of selling uncovered puts on Figmaum and as long and it's I can do this every week, generate income off of it as the stock is fluctuating up and down and at some point hopefully I'll have the chance to buy it again at 20. >> That's such an interesting way to look at investing in the stock and this stock chart is wild. Like you said, the the price action on this one has been crazy to look at. Do you think that there's any fundamentals? I want to talk about the business itself. Why for you is this a buy at 20? Is there something about the business that makes you think that this is going to be um a good investment someday down the road? >> Their user base is growing 56% year-over-year. They just announced earnings yesterday. They were expected to lose 16 cents a share. They made 10 cents a share. User engagement is increasing. So, the company is doing everything right in the software space. So, as AI is supposedly destroying some of the other software names, it's a benefit to Figma. So Figma improves their business because of AI and because of the disruption in that particular industry. So if you get to buy it at 20 and just tuck it away, you're going to do just well over time. I like the idea, of course, of generating some income off of it in the meantime, which is why I like the idea of selling uncovered puts. So as a short-term trader, I love the opportunity to sell uncovered puts on it here. As a long-term investor, I like the idea of buying it for anywhere close to 20 and just sitting on it. >> All right, a really good first pick to look at. And in fact, I think it's such a good pick. I think it's the name I want to add to my Brit Spies watch list. This is a paper trading watch list that I like to pick about one stock every video we talk about to add to this watch list and see how it moves over time. And this one is an interesting thesis for future growth. So, I'm going to add this one to that watch list if you want to follow along with Bridget Spies. You can scan the QR code or click the link in the description. Again, I think it's an interesting name and the looking at the chart, it's down so much from where it has been historically. So, it'll be interesting to see how long it takes to get back to those highs this one has seen. And that's a similar story with the next stock that we're going to talk about. This one has had some really good highs in the past. >> Yeah, let's talk about it's the um you know their their drone technology, uh military, aircraft, missiles, that sort of stuff. Uh Kattos is you know their number one customer is the defense department and defense business. The the budget for the defense department is increasing almost exponentially. A lot of that money is going towards drone technology. And so Kattos was $35 a share this time last year. It ran all the way to 120. And again, like very much like Figma had no business at 120. I think had no business at 120 either. It has since come all the way back down. It's right around $53 a share today. I like the stock, but I don't want to pay 53. I want to pay somewhere 50 or maybe 45. So again, a good way to do this is to sell an uncovered put option that obligates me to buy the stock at 45. For that, I can get paid a couple of bucks today and have that obligation for the next 30 days or so to buy the stock. If it gets down to that level, I'll buy it at 45. And again, it's one of those stocks that, you know, if you look at it on its own, it trades, even at this level, trades 76 times earnings. You can't really call that a value stock, but those earnings are growing at something like 45 50% per year. So it justifies having a an inflated price earnings multiple relative to other stocks that you might look at. But specifically because of the drone technology, because of the increase in the defense budget, all of these things go in favor of owning over the longer term, but over the short term, I like the idea of being able to generate income just to sit back and wait to see if that price comes down to where I'm willing to buy it. Yeah, I personally have been very bullish on the drone sector this year because of all that defense investment and that budget increase that we talked about. Um, and so the drone sector is seeing the dip that it's seen at the start of 2026 has been somewhat surprising to me because there's so much expectation for a lot of money flooding into this area, but it's not showing up in the earnings quite fast enough. And I think that's the story for KTOS. It's been doing well on earnings, but only small earnings beats, nothing huge kind of growth story. But I want to talk about maybe sectorwide, not this specific stock. We did just see another name in this space called Onis, ONDS. Um, that one was up. Uh, I saw almost 30% jump on Thursday. Uh, and that was all because it had a really strong earnings report. And so I think that we might start seeing that in more of the drone sector. Do you think that this is one of those stocks that kind of trades as a group kind of like the quantum computing stocks that trade as a group? Do you think drone stocks when you see a strong report from one, it might lift the tide for the others as well? >> Yes, I really think it does. And not just not just limiting specifically to drones, but also to defense in general. If you look at uh Rathon, you look at Northro Brahman, all of them have a similar looking chart where you had this nice move up higher into the beginning of the year and then they've all come off those highs. I think just about everybody in the defense sector is trading below where they started at 2026. Part of that is because the enthusiasm behind their business sector as we started the year was probably a little bit out of hand and now it's come on back down uh to a much more reasonable level. So rather than rather than buying as it's soaring higher, I like to buy things as they're trying to find a bottom. That's the whole idea. Buy low, sell high. I wasn't a buyer of these stocks back in January, but they look much more attractive to me now. And I think with the uh ONDS um having a good report, I think that will spill over into the others. >> I want to talk about one more thing with with the option strategy. Looking at this stock in particular, really any of these stocks, I think that the question remains, is there a risk here? So, let's say you're interested in the stock. You think that this is a good time to to get in on this name. If you do that option strategy that you're talking about, is there a chance one that you never own the stock? And then the other risk to talk about is is there a chance that you end up getting stuck with a stock when a stock maybe tumbles on some really bad news, some kind of bad headline, bad news for the company and that's why it gets below that point. Talk about both of those potential risks. >> The main theory behind this is you only sell uncovered puts on stocks that you want to own anyway. So if you were looking at KTOS and it's trading around $53 a share today and you thought I would be willing to buy it at 50 if it got down to 50. Well, you still have those same risks that you talked about. If it never gets to 50 and it just moves up from here, you never got in. At least by selling uncovered puts, I'm going to collect some income and if the stock runs up, I've still collected a little bit of money. So, I profit a little off of that. If I'm willing to buy it at 50 and it comes down to 50 and I buy it at 50 and then bad news comes out and the stock gets hit down to 40 or 35, I'm no worse off selling an uncovered put option be by agreeing to buy it at 50 because you would have bought it at 50 anyway. So you only sell uncovered puts on stocks that you want to own at the prices you're willing to own them. Now if you're very conservative and you think you know I'd love to own at 50 but gosh if I can get it at 45 well then sell an uncovered put at 45. It limits you a little bit there. There's other strategies you can do too. You can sell uncovered put at 45 and then create a combination strategy by buying a put that gives you the right to actually sell the stock at 40. But that goes way beyond what we're going to be able to talk about in a in a 20-minute broadcast. But the the philosophy here is if you like a stock, if you're willing to buy it anyway, then you can buy the stock at the price you're willing to pay anyway, you can get paid just for agreeing to do that. And sometimes, and and this is one of those those double-sided benefits, I think, of selling uncovered puts when the market is getting hit, when it gets in freef fall, a lot of folks cannot step up even though they know I want to buy this stock if it gets to this level. just the emotion behind it and the panic and and the herd running in one direction. You, oh, it's so hard to pull the trigger and make that buy purchase. So, you don't do it. So, you miss out on your opportunity. If you have sold an uncovered put option where you say, I'm going to buy it at 50 if the stock gets down that way. As the stock gets hit, you don't have that emotion. You've already made that agreement when you had a rational, logical thinking process. And now with the emotion hitting the market, you can sometimes be forced into a position that you wanted to have anyway and then when it comes on back, you know, you were forced to make a profit. I I go back to, you know, we we just recently had a sell-off back in March and I sold a lot of uncovered puts into that situation and on several of the positions I wound up buying the stocks and I may not have been willing to step into that turbulence and buy the stocks had I not made that decision ahead of time. And then when we got this beautiful snapback rally, I was forced to make money. >> Yeah. And everyone hates being forced to make money, right? I I think that's a great a great way to explain options. And again, if this seems new to you and if you have stayed away from options because it's confusing or maybe you've tried out options on your own and didn't work out for you so well yet. Again, Jeff is such a great teacher. And if you want to join that 5day free ironclad challenge to try out the strategy that that Jeff is talking about, we have a QR code here and a special offer in the link in the description if you want to try out this this free class of learning how to do this with Jeff and his son. I think that's a great way to teach this course to Jeeoff. I think it's a great program. Let's get on to this last stock that you're talking about. And this is the one I was most excited about when you shared your list with me because it's a name that's been very popular um on this channel. We talked about it maybe two years ago when it was seen a lot of excitement and it has not done much of anything for almost a year now it seems like. Let's get to this third name Jeff. >> Well, third name is Soundhound and it's one that it's not going to show up on anybody's value list of investments, but it looks interesting to me because Soundhound is the the AI voice generation. If you're in a car and you say, you know, where's the nearest gas station, it is Sound Hound's technology that interacts with that. So that's what you're basically buying into and it's a very small uh business at the moment but it's growing and you can see the potential for a very large business to emerge and Sound is probably the number one way to play that. Sound hound is not profitable. So like I said it's not what shows up on a value but at $8 $8.50 a share I think is trading for right now. It's a whole lot better purchase at this level than it was say in January when it was trading around 2822. It was trading around $8 a share a year ago, ran all the way to 2022, and it's all the way back down to $8 a share today. So, it's kind of a little roundtrip ticket that nobody likes to to be on the ride the entire time. But, if you're looking to get in, if you like the idea of buying Sound, you like that technology, and you liked it at $15 to $20 a share, you got to love it at 8 $85 a share. I like it somewhere closer to 8 bucks than where it is 8 8 1/2. So, here again is an opportunity where I can sell an uncovered put option with a strike price at 8, get paid today just for agreeing to buy the stock if it goes on sale for eight bucks a share sometime in the next few weeks. And I get paid a little bit today to to make that agreement. So, here again, it's one of those where I like the name. I like it long term, but I'm waiting for a little bit better of a price in the short term, and while I wait, I can get paid to do so. >> Yeah, this is such an interesting name. I mean, like you said, that volatility has absolutely been present for the last couple of years because there is excitement about the potential because of the technology they have, but it's still not profitable yet. What do you think it's going to take for this company to have that success that so many people have put on it for the last year or two? >> Well, there's a difference between profitable as a company and profitable as an investor. As an investor, you need to see enthusiasm come back into the stock. As a company, the company's doing the right things. the company's making the right uh contractual arrangements, they're doing business the right way. So eventually it will be profitable. The market will discount that before it actually happens though. So and that's part of what happened back in December, January when it was trading near 20 is folks were anticipating a profit a lot faster than what the company was ready to deliver on. Now it seems like folks are looking at us saying, you know, this may be a while before it's ever profitable. Ultimately, that probably changes a little bit. So profitable as an investor, I like the idea of buying it somewhere around $8 a share. I think it'll be profitable relatively quickly if you can get it at that level. Profitable as a company is a different story. It might take 6 months to a year from here. >> Well, thank you so much for this list today, Jeff. Really three great names that our investors can look at right now. Again, if you want to learn more about options, Jeff is your guy. He is a great teacher on this. Thank you again for the time today. And if you are interested in more of these value kind of stocks, make sure to watch this video where we talk about some other names. They're on a downtrend. Um, they might have gone up a little bit since this video, but still a really interesting conversation if you're looking at them long term.