These stocks are all down 14% or more in the past three months.
Many growth stocks have come under pressure recently as investors worry if their valuations are too high. But buying strong growth stocks after they’ve dipped in value could set you up for some great returns — assuming, of course, that you’re willing to be patient and wait for market conditions to improve.
Three stocks that have been struggling of late but may be excellent long-term investments are Celsius Holdings (CELH 3.43%), Novo Nordisk (NVO -0.52%), and Dell Technologies (DELL 0.27%). These stocks haven’t been doing well in recent months, but here’s why they can be great places to invest $5,000 in right now.
1. Celsius Holdings
Energy-drink company Celsius Holdings has generated transformational wealth for investors over the years. But in just the last three months, the stock has lost close to half of its value as investors have worried about its slowing growth rate. While Celsius still grew at a solid rate of 23% in its most recent quarter, which ended on June 30, that’s down from the impressive 112% growth rate it achieved a year earlier.
It would, however, be difficult to maintain such a high growth rate, especially as the company laps stronger results. But with Celsius still generating good numbers and expanding into more international markets while focusing on a growing sugar-free market, there’s plenty of reason to remain optimistic that it can remain a top growth stock to own for years to come.
A price-to-earnings multiple of 30 isn’t terribly expensive for such a fast-growing stock. While the near term may be challenging for the company if consumers scale back on discretionary spending if a recession hits, this can still be an excellent investment to hold for the long run.
2. Novo Nordisk
Shares of healthcare company Novo Nordisk are down 17% in the past three months. While that’s not a huge sell-off, getting this top growth stock at any reduced price could be a good move for investors.
Novo Nordisk is a big name in diabetes and anti-obesity treatments. Its best-known product Ozempic has become a hot trend on social media in recent years. Even though it’s an approved treatment for diabetes, many people have been using Ozempic for weight loss.
Novo Nordisk’s approved weight loss drug Wegovy is still in the early stages of its rollout — it was approved for use in the U.S. a little over three years ago. As the company expands its capacity and launches Wegovy in more international markets, its already strong financials could look even better in the years ahead. Through the first half of the year, Novo Nordisk’s net sales are up 25% on a constant currency basis, totaling 133.4 billion Danish kroner ($19.7 billion).
Novo Nordisk trades at 39 times earnings, but that’s still far cheaper than rival Eli Lilly, which is trading at a multiple of more than 100. Novo Nordisk is a far cheaper buy. With plenty of growth still on the horizon, it’s a fantastic stock to buy today.
3. Dell Technologies
The third promising growth stock to buy on the dip right now is Dell Technologies, which has fallen by 14% in the past three months. I like Dell because the business is experiencing a surge in demand for its servers due to heightened spending on artificial intelligence (AI)-related products and services, and there’s still a huge opportunity in new AI-powered computers.
The company’s server and networking revenue grew by 80% in its most recent quarter, which ended on Aug. 2. But in the client solutions group segment, which includes personal computers (PCs), revenue declined by 4%.
This mixed bag of results tells me Dell still isn’t firing on all cylinders, but when it does, the stock could become a red-hot buy. AI-oriented PCs are a big growth opportunity for Dell and other computer companies as consumers upgrade their machines to take advantage of next-gen technologies. When that happens, the stock could go on a much higher trajectory.
Trading at a modest 22 times earnings, Dell is a potentially underrated AI stock to buy right now.
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Celsius. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.