4 Stocks to BUY the Dip on

The concept of buying the dip sounds easy until the stock actually drops. That's when fear takes over and most investors hesitate. I often say the stock market is the only place where investors run away from a sale. But the best investors with the right mindset are buying the dip in those high quality names. But not all dips are the same. Some are warning signs. Other are opportunities. And with the stock market at all-time highs, most stocks are closer to their 52- week high, but not all of them. In today's video, I'm going to be breaking down four stocks that have pulled back. Stock number one is down 16% and one of the names on this list is down 50% from their recent highs. But I think the market may be overreacting to all of them when it comes to these particular names. Each one is down for different reasons, and that's exactly where opportunity comes from. Let's start with one of the most reliable businesses on the list today with stock number one, which is going to be AVY, stock ticker ABBV. This is a classic case of the market focusing on one risk, not seeing the forest through the trees. Avy has been under pressure because of concerns around humra patent expiration always overblown in my eyes. And then questions about future growth. But here's where the market is underestimating. Their pipeline and newer drugs, Skyrizzy, Renvoke, just to name a few, are already stepping in to replace that revenue and more left from Humera. plus strong cash flow, consistent growing dividends. This is not a collapsing business. Over the past 12 months, shares of AVY are slightly up less than 5% and maintain a market cap of 360 billion. However, since October 1st of last year, shares of AVY have pulled back 16%, giving investors an opportunity at a much better entry point. At the end of 2022, AVY saw its bestselling drug in Humumera lose its patent protection. Not only was AV's bestselling drug, it was the bestselling drug in the world. Once this happened, results pulled back, but that was expected. But now that pullback appears to have bottomed, and the company is once again looking towards growth. Looking here, we can see revenues are again at record highs, and free cash flows are once again on the verge of growing again for the first time since 2022. Strong free cash flows allow the company to pay a solid dividend, one that continues to grow. The yield is currently 3 and a.5% on shares of AVY with a 5-year dividend growth rate of 6% and 12 consecutive years of dividend growth. From a valuation perspective, shares of AVY currently traded a forward PE of just 13.7 times, which is the lowest we have seen since 2023 and a forward EV to EVIDA of just 12.2 times, which is also the lowest since 2023. I believe the $200 level or less is a compelling entry point for this great company. And when it comes to running any business, time matters and efficiency matters, especially when dealing with the behind-the-scenes task to run a business of any size. That brings me to today's sponsor, which is Zero. And before we move on to stock number two, let me thank today's video sponsor, which is used by more than 4 million people to help make accounting and business tasks more efficient and to help business leaders or content creators like myself get back to what we do best. Understanding where your cash is flowing is uber important in the business world and Zero has a fantastic cash flow feature that takes you from financial uncertainty to cash flow clarity. Tax season is now behind us for the most part so businesses can turn their attention back to daily operations. And when invoices and bills are coming in, you could feel unorganized and stressed out. However, it doesn't need to be this way. When you let it run through zero, from invoicing, bill payments, bank feeds, and analytics, small businesses get a clear, real-time picture of money flowing in and out and what's left over to invest, so cash flow starts to feel more calm and predictable rather than overwhelming. So, give Zero a try today with a current offer at the time of this video of 90% off for 6 months using the link in the description below. All right, now let's get back to our video looking at the second stock to consider buying the dip on, which is one I really like. And that stock is going to be SoFi Technologies, stock ticker Sofi. SoFi recently reported a pretty solid quarter, but the stock got punished down nearly 10% following the report. This is certainly a name that does not shy away from volatility up or down. So what happened, you might ask, that caused the stock to dump that much after earnings? It was a case of expectations and investors looking through a narrow lens rather than understanding the bigger picture. And before we get into those earnings, let me show you the performance of SoFi over the past year, which has not been all that great of late. Looking here, you can see over the past 12 months, shares of SoFi are still up 25%. But look at the dip since mid November. Shares, as you can see here, are down nearly 50% from those highs. That is the definition of a big dip right there. Now, let's get to the latest earnings report where we can see EPS was in line with analyst expectations. Not a bad thing by any means. And then revenue beat expectations by $50 million. So, on the face, everything seemed okay. So, what was the big catalyst for the down move? It was guidance. And I say this a number of times on this channel. It's less about what you did for me and more about what you're going to do for me. Meaning, it's less about recent earnings and more about forward guidance. That does not say recent earnings doesn't matter, but investors want to know where are we headed. And what SoFi investors were looking for was increased or raised guidance. This phrase you could see on your screen here is what caused the drop. Maintain. Management will maintain its strong outlook for 2026, meaning no changes to guidance. Short-term thinking investors wanted a bit of a raise. So, if SoFi reached their expectations, though of 60 cents per share in terms of EPS, that would still be growth of more than 50% on a year-over-year basis, but investors get greedy. That is very strong growth. To sell this name on what you saw in earnings is wild to me and a huge opportunity for longerterm investors. Look at this chart here showing membership growth over the years. Today, the company has amassed more than 14.7 million members and prior to the pandemic, they had less than a million. This is a company that continues to expand its reach, gain members, and expand its products. Trading at a mid20s multiple with 50% growth in EPS this year and 35% growth next year. That is a stock I want to buy on the dip at these prices. Want to play it from an option standpoint? If so, I would look to sell the June 18th $15 strike, which would generate around $60 per contract. So, I would likely do a number of those, but choose the best route for you. And as always, perform your own due diligence. And if you're interested in learning more about options, be sure to join my 2-day option workshop that starts tomorrow, May 6, at 7:00 p.m. Eastern time. Learn how options can take your investing to the next level and how I generate my goal of roughly $10,000 per month in option premiums. Check out the link in the description below to save your seat before they're gone. Now, let's move on to stock number three, which is going to be S&P Global, stock ticker SPGI. This can be a controversial name for some considering I put a software stock on the list. Some investors hear software company and it gives them chills. However, this is one of the highest quality businesses in the market, but it's pulled back due to slower deal activity, weaker issuance environment, and most of all, what I call perceived AI threats. Over the past 12 months, shares of SPGI have fallen 16% and they're down 25% from their August highs. We do not need to rehash how all software stocks have been under siege the past six plus months. Even the likes of the great Microsoft have felt the pressure. The company recently reported their Q1 earnings last week which beat on both the top and bottom lines and shares initially jumped at the open but later faded and now find themselves back around 425 per share. Q1 revenue jumped 10% with subscription product revenue increasing 6%. It was the guidance that came in short of analyst expectation for both EPS and revenue. Again, it's less about what you did for me and more about what you're going to do for me. This is a company that continues to grow revenues, not like a growth stock because it's not, but still a high margin business with operating margins of 44%. They also generate 35% plus free cash flow margins, which I love to see. Looking here at valuations, you could see we are looking at this stock from two different angles. Forward PE and EV to Ebida. Both are trading near their lowest levels since the pandemic. Only 2020 lows and 2022 lows were cheaper, but we're not that far off. This is a big data company and trading at an intriguing valuation with strong margins and a solid business mode. A long-term compounding machine. Now for the final stock on our list, which is going to be stock number four, and that's Disney stock ticker DIS. It's funny because both my kids know I'm heavily involved in stocks and helping coach others to learn how to invest and value stocks through my investing accelerator program. And I've talked to them at a high level about stocks and what they invest in. But my daughter really tries to get me with this one. We don't live too far from Disneyland and she often says, "Daddy, let's go to Disneyland so they can make money and help the stock price go up." I generally laugh, but said, "Let's do that maybe one or two times a year and leave it up to others to do the rest of the year. We don't need to take it upon ourselves. But in all seriousness, this is probably the most debated name on the list. Disney has struggled with streaming profitability, leadership transitions, and a declining linear TV. And the market has seemingly lost its patience. But here's where the opportunity could be. This is still one of the strongest content brands in the world with unmatched IP and multiple revenue streams. The key question is execution. Can they improve streaming economics, stabilize the business, and refocus strategy? Over the past 12 months, shares of Disney are up 10%. But do you want to hear a stat that's really sad for those of you that have been investing for some time in shares of Disney? Over the past 10 years, the S&P 500 has climbed an impressive 250%. Meanwhile, shares of Disney have absolutely gone nowhere. Meaning, had you invested $10,000 10 years ago, that would be worth generally $10,000 today. actually slightly less. And with the assets they own between parks, resorts, cruise ships, and media, they should have a lot more to show. So, why do I believe this time is going to be different? Well, for starters, the new leadership team is going to breathe fresh new life into the business. And the new CEO doesn't live all that far from me, but he's going to take and really lean into their media and all of those assets. Now, before we run and buy this name today, earnings actually come out tomorrow on May 6th before the market opens. So, let's take a wait and see approach with those earnings. I would rather wait and hear from the new CEO before buying. Even if the stock does in fact jump and we say, "Oh, we could have had it at a cheaper price." It's better to have a clear picture from that standpoint. But in the case of a drop, look at the reasons why. Are they short-term or long-term impacts? What's the reasons? But be forewarned that typically when new management teams come into power, they want to reset expectations and set the bar low. So, I wouldn't be surprised to see a reset on earnings guidance. And if shares do drop and fall below $100, I would be scooping them up in my portfolio. Right now, shares are not all that expensive, trading at just 14 times forward earnings multiple with double-digit earnings growth expected for each of the next few years. So, not having to risk much in terms of valuation as the bar is already relatively low, but it can certainly get lower. So, what does the market see? A broken media company. What matters? This is a company with strong brand power and a potential turnaround. Higher uncertainty but also meaningful upside if they do in fact get it right. So to step back and look at these dips we saw AVY which is going through their transition which has seemingly bottom now from Humera and now passing it on to Renvoke Skyzy and others. Sofi technology seems like a sentiment issue higher risk but also a growing subbase. S&P Global cyclical and AI slowdown than the Walt Disney Company. execution doubts, different reasons, same opportunity. The market may be overreacting. And if you found any value in today's video, show your appreciation by hitting that like button down below and subscribe to the channel. It truly makes a difference, and I would appreciate it. Also, make sure you get signed up for my 2-day option workshop starting tomorrow, May 6th, at 7:00 p.m. Eastern time. And even if you can't join the live portion, you will gain access to the recordings as well. So, thanks again for watching, and we'll see you in the next one. Take care.