Every so often the market gives investors a chance to pick up some high potential stocks at a significant discount. After all, the smart money buys low and sells high, right? Here's a list of a few stocks in my portfolio or my watchlist that have seen recent declines that have a good chance of seeing a rebound in the near to medium term:
NVIDIA (NVDA): NVIDIA designs high performance graphics processing units (GPUs) for use in PCs, workstations, smartphones, tablets, and servers. With $3B in cash, very little debt, and a strong product line, the company seems cheap at these levels with a $7.67B market capitalization, especially since the stock has been selling off despite reporting an excellent quarter and issuing strong guidance. As supply constraints ease on its 28nm products, it should see significant improvements to its top and bottom lines going forward.
Electronic Arts (EA): EA develops, markets, and publishes video game software for game consoles, smartphones, tablets, and the PC. The stock is off significantly from its 52-week high despite reporting a solid quarter. Concerns here are on a weak guidance and on fears that their latest MMORPG, "Star Wars: The Old Republic" is seeing diminishing subscription numbers. The upside drivers here are an increased focus to meet the demand for mobile/social games, the continued leveraging of their core game IP, and the potential release of new game console systems from Microsoft (MSFT) and Sony (SNE) within the next year.
Micron Technology (MU): Micron is a semiconductor manufacturer that primarily focuses on producing and selling memory and memory related products such as DRAM, NAND flash, NOR flash. Under its "Crucial" brand, it sells products such as solid state drives and memory modules to the consumer that utilize the aforementioned products. The stock has sold off significantly since March of this year on concerns of the continuing commoditization of DRAM. Given the consolidation of the DRAM business following rival Elpida's bankruptcy, ASP and margins there should improve. In addition, as solid state drives gain more traction, its flash memory businesses should see significant revenue upside.
OCZ Technology Group (OCZ): OCZ designs and manufactures leading edge solid state drives for both consumer and server/enterprise use. To avoid simply being a commodity solid state drive manufacturer, OCZ acquired Indilinx and PLX technologies in 2011 to help it develop proprietary controller IP, and SANRAND in 2012 to help build flash caching and virtualization solutions for enterprise products. Concerns about a lack of profitability, especially after posting a surprise $10.9M loss in the most recent quarter sent shares plummeting. However, gross margins are steadily improving and high revenue growth for the year should lead to a nice rebound.