The markets are coming out of a volatile week, but the S&P 500 still managed to produce a positive gain of 0.8% at the end of it. However, some actions were not so lucky: Shopify dropped 12% and Tesla decreased by 11%. If you’re a bargain hunter, the good news is that there are some decent deals out there right now – but there’s no guarantee how long they can last.
Three actions that seem particularly attractive at the moment are Cerner (NASDAQ: CERN), Walmart, (NYSE: WMT), and salesforce.com (NYSE: CRM). None of these stocks fell more than 3% in value last week, but last month they fell sharply and now may be an ideal time to buy them.
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1. Cerner
In a month, the shares of the health company Cerner fell 12%, while the S&P 500 fell a more modest 1%. Part of the downturn is likely because Cerner released its fourth quarter earnings on February 10 for the period ended December 31, 2020, and the results were somewhat disappointing. Sales of $ 1.4 billion fell 3% year over year, while diluted earnings per share of $ 0.46 was also less than the $ 0.49 that Cerner earned a year ago. Had it not been for the divestments, the company claims that sales growth would have been around 1%. A year ago, the company agreed to sell software products it used in Germany and Spain to CompuGroup for $ 247.5 million. In 2019, they grossed $ 81.4 million.
But the company expects a better way forward, projecting a 2021 revenue of between $ 5.75 billion and $ 5.95 billion. At the bottom end of this forecast, that would mean 4.4% sales growth compared to the $ 5.5 billion generated in the whole of 2020.
What’s great about Cerner is that your business is diverse and there are many ways to make money. Professional services revenue totaled $ 1.9 billion and accounted for just over a third of its sales in 2020. The company also earned $ 1.2 billion from managed services (this includes remote hosting, application management and data recovery) disasters) and US $ 1.1 billion with support and maintenance, in addition to other smaller segments.
With more companies, including hospitals, going online and relying more on software vendors like Cerner to help them manage their data and systems, Cerner can prove to be an underestimated investment at the moment. Trading at a forward price-to-earnings (P / E) ratio of 22, the stock is a business theft when compared to Veeva Systems, for which investors are paying about 80 times the company’s future profits.
2. Walmart
Walmart’s shares fell 11% last month, but the big retailer always has the potential to be a big long-term investment. Its stores are one-stop shops for consumers looking to minimize their shopping trips in the midst of the pandemic. With the price drop, the stock is trading at a future P / E of around 24. This is still slightly higher than that of the rival Target, which is traded at a multiple of about 20.
But with Walmart taking over Amazon and with the launch of Walmart + in September 2020, the company could be worth the award if it manages to gain market share from the online retail giant. Walmart is also trying to make it easier for people to use its delivery services, announcing this month that it will cut the minimum $ 35 value it previously required on orders to use express delivery. The service allows consumers to receive food, consumables and many essential products delivered to their doors in two hours (in available areas). It can be an effective way to dissuade customers from using same day delivery with Amazon.
Walmart is already doing exceptionally well in the midst of the pandemic, releasing fourth quarter results on February 18, which showed that e-commerce sales in the U.S. remained strong, growing 69% in the period ended January 29. Even sales of comparable stores in the US increased by 8.6%. While these growth rates may decline if concerns about the pandemic subside, the company is still a solid investment as it continues to try to reach more customers. Walmart shares closed the week at $ 129. The last time it was lower than it was in July 2020.
3. Salesforce
Salesforce shares fell 12% last month, as it has also been struggling to win investors over recently. Its future P / E of more than 60 is not cheap and rivals technology giant Amazon, which trades at 64 times future earnings. But investors like Salesforce for sales growth, and it’s a great deal to invest in, as more companies are looking to the cloud to simplify their operations and marketing efforts.
The stock is trading at around $ 210 and has not been so low since August 2020. And if you thought the stock was a decent buy, you will probably think it is a deal now, since that was before the Salesforce announce plans to acquire collaborative enterprise and group messaging Day off a few months later, for $ 27.7 billion.
It is a major change that could make Salesgrowth’s numbers even more impressive. On February 25, it released its fourth quarter earnings and sales of $ 5.8 billion increased 20% year-over-year. The company expects a similar growth rate to continue in the next fiscal year (2022), projecting that Slack will contribute $ 600 million in sales – with the assumption that the deal will close at the end of the second quarter.
This tech giant is not cheap, but getting it with any reduction in value can be a good deal. With companies cutting staff and costs in the midst of the pandemic, there may be a great need for companies to become more efficient, and that is something Salesforce can certainly help with. Projecting sales figures is difficult in the midst of the pandemic and it would come as no surprise for Salesforce to overcome this year.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even our own – helps all of us to think critically about investing and making decisions that help us become smarter, happier and wealthier.