2 battered stocks to buy for the January effect
Don’t overlook the impact of the January effect
Do you know the term “the January effect”? It refers to a theory that stock prices rise seasonally during the month of January. This could happen for a variety of reasons, including investors taking advantage of the lower prices that occur in December when the harvest of tax losses is a factor. It’s also possible that investors will use their year-end bonuses to add stocks in January. Either way, it’s important to be aware of a potential rally to start the year 2022 with The January Effect.
While the current market environment may not look very appealing to investors with cash on hand to work, sentiment can change in the blink of an eye. Staying prepared with a solid watchlist of stocks and dry powder to roll out once the stock markets start to perform better can really pay off as we head into a new year of trading. There’s a good chance some of the battered stocks of 2021 will see some sort of rally in January and beyond, as investors attempt to generate alpha from areas of the market that offer intriguing risk to reward investors. profiles.
That’s why we’ve put together a quick rundown of 3 Beaten Stocks To Buy For The January Effect. Let’s take a closer look below.
Zoom Video Communications (NASDAQ: ZM)
Zoom Video was certainly one of the biggest winners during the pandemic, but the stock took a hit throughout 2021 as the world reopened and people began to return to classrooms and offices. While it’s always difficult to call the exact bottom of a stock, it could be argued that Zoom’s sell-off has been exaggerated and stocks may see a rebound in the coming months. The company provides a communications platform that connects people through video, voice, chat, and content sharing, and has consistently seen impressive profit growth in recent quarters.
Most recently, Zoom Video reported third-quarter revenue growth of 35% year-over-year to $ 1.051 billion, with new customers accounting for 74% of revenue. Some analysts believe the way people work has changed permanently after the pandemic, and Zoom is the type of business that is expected to continue to thrive as more businesses rely on hybrid desktop models. /remote work. It’s also worth noting that Zoom spends a lot on R&D to bring new products to its existing customers, and the company is already benefiting from up-sells from Zoom Phone and Zoom Rooms. Keep an eye out for Zoom in the coming sessions as it’s a disruptive business that could be on the rise to start the year.
Companies in the digital payments industry have seen their stock prices plummet in recent months, and Block Inc is a case in point. The stock just hasn’t been able to find a bid lately, and stocks are reaching extremely oversold levels. Much of this is due to the overall perception of the macroeconomic situation, as factors such as rising inflation and slowing the economy could negatively impact these companies in the short term. That said, the digital payments industry is not going anywhere and is poised to experience massive growth over the next decade, especially considering how electronic payments can thrive overseas. Mass selling in companies like Block could end up being a fantastic long-term buying opportunity, although investors should always be careful not to add too much exposure.
This tech company officially known as Square focuses on financial services products including Square, Cash App, Spiral, Tidal, and more. Square is a piece of hardware that converts iPads into payment terminals and helps entrepreneurs manage their business finances more conveniently. Another popular offering from Block is Cash App, which allows consumers to send, spend, and store money on an app, and even buy and sell Bitcoin. While the shares of this innovative fintech company have sold relentlessly, it should be noted that the company reported gross payment volumes up 43% in the third quarter and saw its net income increase by 27%. It’s also an intriguing “reopening game”, as many Square merchants stand to benefit from the return of people in the public after the pandemic.