2 Stocks I’m GREEDY on While the Market Is Fearful

CNN has a nifty little tool called the Fear & Greed Index. It tracks the mood of the market and lately it's been veering into the feared territory more often than not. With the wild swings in semiconductor and tech stocks and the overall market volatility, it's not hard to see why people are spooked. But I'm here to tell you that doesn't mean you have to run to cash or head to the sidelines. I'm going to show you exactly what the data is flagging to handle the situation logically. All the while far too many are reacting emotionally, usually a pretty bad idea. Then we're going to finish up strong with two attractive stocks that benefit from this unique setup. Now, if you like the sound of that, then please give this video a like as it tells me to record more topics like this in the future. By the way, I'm Steve Rightmeister, but all my friends call me Righty. I've been investing for over 40 years and spent nearly half that time as the editor-in-chief of Zacks.com. Now, I'm a partner at Wallstreetzen.com where I help create a quant rating system to simplify the fundamental research for stocks, which gives investors greater peace of mind. Now, for the reality check, there is a Warren Buffett principle worth remembering right now. Be fearful when others are greedy and greedy when others are fearful. That perfectly fits the situation now. Unfortunately, for far too many people actually following that wisdom packed into Buffett's statement is a little too tough. That's because in the moment fear doesn't feel like an opportunity. It feels more like a warning you need to heed immediately. And lately there's been plenty to be nervous about. Here are four reasons why fear is spiking again. Reason number one, the semiconductor stocks. The group that's led the entire market for over a year just posted their best first half ever, up roughly 80% as a group. Then in the span of about two trading sessions, that same group dropped over 9% as traders rotated out of those stocks and many of the big names saw corrections of 20% or more. Now, reason number two, the Nasdaq had its worst week in a year this past June. It fell nearly 5% meaning the pain was not just isolated to semiconductor stocks, but throughout the broader tech group. Now, a lot of that fear is whether the current toward pace of AI CapEx spending will continue even as many companies complain about poor return on investment from their AI projects. Now, reason number three, inflation is running hot at its fastest pace in over 3 years. May's report showed prices up 4.2% year-over-year and no doubt largely because of the higher energy costs. Now, reason number four, because of the inflation fears noted above, the new Fed leadership is making it clear they may be on the verge of rate hikes, never a popular idea with stock investors. By the way, if you want uh more timely commentary along these lines, then the best thing you can do right now is to sign up for my next live training session this coming Monday. The focus is on timely market insights plus my top stock picks. It's totally free, but you do need to sign up. Do that now to join me this coming Monday at 7:00 p.m. Eastern Time. Just go to wallstreetzen.com/live. Back to the topic at hand, there are a lot of reasons for people to feel nervous right now, but this kind of environment also creates some great investment opportunities. But, the name of the game isn't just buying a stock because the share price has come down from the highs. The key is telling the difference between a stock that is down because of a market rotation and set to bounce back with gusto, or is a stock that is down because the future earnings prospects have dimmed and likely will continue to head lower and lower in the months ahead. Yes, this is a little easier said than done, but clearly I have something that helps greatly on this front. This is exactly why I helped build the Zen Ratings Quant Model. This is our proven system that evaluates 4,600 stocks every single day across 115 different fundamental factors. It then boils it down to a simple letter grade from A to F with uh A being the best stocks, which historically have outperformed the market by nearly three to one. Nestled underneath the overall rating are seven individual component grades that show you where a company is strong and where it is weak. These grades cover key areas like growth, value momentum safety financials and our proprietary AI factor that points to the most timely stocks. So, when the whole market gets nervous, I'm not relying on just a gut feeling. I'm looking at the hard data underneath the price to tell me if I'm dealing with a fundamentally sound stock to buy on the dip or a faltering company to avoid like the plague. So, around now you might be wondering, how do I find the stocks that are best picks in the face of fearful market. Now, here's what I'm looking for. A company where the fundamentals and the smart money are already pointing up, but the price is depressed. That gap represents the investment opportunity. To demonstrate what I mean, I'm going to share two stocks with you now. Both have the highest possible grade from our Zen ratings quant model. Both are backed by very bullish Wall Street analyst support, and both still have depressed stock prices that point to hearty buy the dip opportunities. Before I start, let me remind you this content is for educational purchases and not a recommendation to buy or sell anything. Always do your own homework before investing your hard-earned money. First, let's talk about the investment case for Arlo Technologies with the symbol of ARLO. It used to be a home security camera company. That means hardware and thin margins. Now, they are reinventing the business into a high margin subscription business specializing cloud storage, smart alerts, and AI detection. That shift from selling just boxes to recurring revenue is a story the market hasn't fully caught up with yet. The fundamental data certainly appreciates the pivot. Return on equity has climbed to 22%, which is well above the industry norm. Even better is the 158% earnings growth delivered in the most recent quarterly report. That is literally 10 times faster growth than the average company around today. By the way, if you're enjoying this content, do yourself a favor and subscribe and turn on the notification bell. That's because I put out this kind of stock research frequently, and it's the best way to ensure you don't miss the next one. Let's get back to Arlo. The Zen Ratings Quant model also shines a bright light on this quality stock. Here we have an elite A rating, which amounts to a strong buy recommendation. The reason for this rating is that it scores in the top 5% of all stocks for its stellar fundamental profile. The component grades highlight the key strengths for Arlo. That's because it stands in the top 7% of all stocks for financial strength. Even better is the top 1% showing for growth. This is the best possible combination to increase the odds of more growth and earning beats ahead. The risk is to be expected here. It's the D grade for momentum, placing it in the bottom 20% of all stocks, given the recent price weakness. Yes, this spells upside opportunity if other investors catch on to this impressive growth story, but there is no guarantee that it will ever happen, or if it does, how long could it possibly take? But in Arlo, we have a truly reinvented business, accelerating earnings growth, and the Zen Ratings point to a stellar fundamental setup. That's a lot of signals pointing higher, even while the share price remains subdued. That is a quality setup to consider for your portfolio. Before I move on to our next recommendation, a little confession. You would already be aware of both Arlo and the next stock if you've been attending my live training sessions the past few weeks. In addition to sharing my updated market outlook and a trading plan to outperform, I also highlight my trade of the week based upon our proven Zen Ratings Quant model and my greater than 40 years of investing experience. Both of the stocks in this video were recent selections. No, I'm not trying to shame you. Rather, I'm encouraging you to come to the next training session this coming Monday at 7:00 p.m. Eastern time. So, don't miss the next one. It's a free event, but you do need to register now. Just go to wallstreetzen.com/live or click the link in the description, or scan the QR code on your screen. I look forward to seeing you on Monday. Our second stock today is DHI Group with the symbol of DHX. Important note, don't confuse it with the ticker DHI, uh, which is a totally different company. I'll refer to it by the ticker symbol DHX from here on to avoid any confusion. DHX operates two specialized job boards, Dice for, uh, technology professionals and ClearanceJobs, which is where the real opportunity lies. Now, ClearanceJobs is a leading hiring marketplace for professionals with US government security clearances. Think defense, intelligence, and other classified roles. You can't fill those jobs through a general job board. That's the economic moat around this business. Now, here's a prime catalyst for DHX going forward. They just acquired a staffing firm, shifting from simply posting government and clearance level jobs to actively placing people in them. That's landing right as hiring demand for cleared military personnel jobs keeps climbing. As you well know, defense spending has a long track record of rising even when other budgets get cut. The market's already starting to notice. As of, uh, this week I'm recording, the stock is up about 30% over the last 3 months. More importantly, there are ample signs that point to a continuation of this upward trajectory. Once again, Wall Street coverage is limited, but very high quality. For example, uh, Gary Prestopino of, uh, Barrington Research maintains a buy recommendation with a price target, suggesting about 150% upside from today's price in the year ahead. Note that, uh, Gary is in the top 2% of all Wall Street analysts for a stock picking performance. That's a serious call from a highly ranked analyst on a stock that most people have never heard of. As you would expect, DHX carries a Zen rating of A, which is our strong buy recommendation. This little-known name lands in the top 2% of stocks tracked owing to its all-around impressive fundamental profile. This further shows up as we review the component grades. Now, momentum ranks in the top 25% of stocks, reflecting at strong recent price action. both growth and value are in the top 24% of all stocks, indicating DHX is not just consistently growing, but also very attractively priced for that growth. That is one of the best tandems of component grades you could ask for. Now, things keep getting even better with financial strength in top 11% of all stocks, and better still with sentiment, which earns an A rating ranked as an elite top 3% of all stocks trek. That's the standard, and tells you the smart money is already circling these shares. Please remember that the Zen ratings are updated daily. So, if you want the latest ratings on this or any stock, then simply go to wallstreetzen.com and enter the ticker in the search bar. And be sure to bookmark the site for frequent future visits. DHX has a truly unique economic moat with ClearanceJobs, and they doubled down on this with the expansion into being a staffing firm for these hard-to-fill positions. The benefit of this shines through their standout Zen ratings. And let's not forget the top-rated analyst calling for 150% upside in the year ahead. This is a setup that may not stay quiet for long. So, here's the actual takeaway. A fearful market isn't necessarily a reason to sit on the sideline. It's a reason to take a closer look. Arlo and DHI Group are two very different stories, yet both of these under the radar stocks have real growth and real impressive fundamentals that point to likely future share price outperformance. Now, I want to hear from you. What's your personal fear level during this time of market volatility? And which of my two under the radar stocks do you like the most, and why? Now, don't be shy. Leave a comment below. It benefits the entire community when you share. And if you're at a loss for what to watch next, then I suggest checking out an important warning I just issued for this earning season. Watch it now, and thank me later. >> Mhm.