The stock market is back re-testing all-time highs. But while the overall market is back, several individual stocks are still well off their highs.
Some are down for fundamental reasons. Others are simply taking a breather, and could be set to trend higher. And a few have been beaten down on news events but are likely to report strong earnings in the weeks ahead.
Of the big-cap tech names, there’s been a notable laggard in recent months. Consumer tech giant Apple (AAPL). After peaking near $260 in late December, fears of slowing iPhone sales have hit shares. The stock is now off nearly 15% from its peak.
Meanwhile, analysts aren’t too worried. And the steep decline leaves shares positioned for an oversold bounce. Apple’s revenues increased 6% in the past year, although earnings growth slid by one-third. Even with a slowing growth rate, Apple managed to hit a 24% profit margin.
Action to take: Short-term investors may like shares here for an oversold bounce. Shares could see a low double-digit bounce higher, possibly kicked off by earnings on January 30.
Apple currently pays a 0.5% dividend, and has a history of share buybacks to reward current investors.
For traders, the March $240 calls, last trading for about $3.20, could turn a low double-digit bounce in shares into high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.