The current market holds bargains. Stocks of once powerful companies have dropped sharply over the past year. This presents excellent opportunities for investors to buy at a low price and sell high later. Buying undervalued stocks on a dip is the best profit-making strategy for long-term investors. In particular, there are undervalued Nasdaq stocks to buy.
Identifying undervalued stocks can be hard. It’s especially challenging amid a sea of red ink or when a stock’s sentiment hits a record low. Finding undervalued Nasdaq stocks can be tough too. This is especially after the tech-heavy index posted a near 30% gain year-to-date.
Contrarian views often yield long-term profits. Holding undervalued stocks for a long time, usually five years or more, also pays off. Here are three highly undervalued Nasdaq stocks worth buying in June 2023.
Cisco Systems (CSCO)
In the last six months, shares of Cisco Systems (NASDAQ:CSCO) have risen a meager 1%. Other tech stocks have gained more than 100% in the same period of time. Yet CSCO stock continues to lag the overall market.
Through five years, the company’s share price has risen only 14%. This is disappointing for a once highly regarded company that has been a going concern since 1984 and today sells more than $50 billion a year of telecommunications equipment worldwide.
CSCO stock appeals for several reasons. It has a low P/E ratio of 17 and a high quarterly dividend yield of 3.14%. This is one of the highest among tech stocks. The company hasn’t had much luck recently. Its share price dropped 4% even though Cisco surpassed earnings expectations.
It reported an EPS of $1 and $14.57 billion in revenue. Analysts had predicted 97 cents EPS and $14.39 billion in revenue. Still, the stock is likely to rise. This will happen as the production of routers, switches, and networking hardware improves along with supply chains. With these factors in mind, CSCO is one of those undervalued Nasdaq stocks to buy.
DISH Network (DISH)
TV and wireless internet provider DISH Network (NASDAQ:DISH) has received both good and bad news lately. On the positive front, DISH Network could benefit from Amazon’s (NASDAQ:AMZN) plans to provide wireless internet service to its Prime members.
On the negative side, DISH stock is being removed from the S&P 500 index and replaced with fast-rising cyber security firm Palo Alto Networks (NASDAQ:PANW). Despite daily ebbs and flows, DISH stock is down 64% over the last 12 months, including a 47% pullback this year.
Pressuring DISH stock has been rising competition from streaming services and internet service providers, as well as subscriber losses. The company has reported successive quarters of earnings misses that has soured sentiment towards the stock.
However, management is taking steps to realign the business. DISH Network remains profitable, unlike many of its competitors, and the stock is available now at a rock bottom valuation. The P/E ratio on DISH stock currently sits at 2, indicating that it is woefully undervalued right now.
Starbucks (SBUX)
Coffee retailer Starbucks (NASDAQ:SBUX) trades on the Nasdaq exchange, and its shares have seen better days. In the past six months, SBUX stock has declined 5% and slipped below the key level of $100 a share.
The shares are now trading 20% below an all-time high reached in summer 2021. The stock trades at a moderate P/E ratio of 31 and offers stockholders a dividend that yields 2.15% or 53 cents a share each quarter. Given its leading market share and future growth prospects, one would assume the stock would be performing better.
Confidence in the company has been shaken by the appointment of Laxman Narasimhan as Starbucks CEO, the first external leader in the coffee chain’s 52-year history. Narasimhan took the reins of Starbucks from Howard Shultz, a legendary CEO who led the company on three separate occasions.
Starbucks has also had a labor problem, with about 300 stores having voted to unionize since December 2021. However, Narasimhan has a turnaround plan underway that includes improving sales in China and growing e-commerce transactions.
— John Baglole
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Source: Investor Place