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Blue-Chip Stocks at 52-Week Low

Updated on March 30, 2023

Blue-Chip Stocks at 52-Week Low Voice Over

Blue-chip stocks have experienced a 52-week low which might present a unique opportunity for certain investors. Blue-chip stocks are shares of companies with excellent reputations and performance. These are typically companies with large market caps and balance sheets that could rival the GDPs of some developing countries.

Investors admire these stocks for their ability to endure tough economic times and deliver high returns, often regardless of the broader economic situation. They are usually leaders in their respective markets, such as Apple, Google, Coca-Cola, and others at that level.

Despite these advantages, blue-chip stocks have gradually plummeted for 52 weeks straight due to macroeconomic factors and not necessarily because of the stocks themselves. With this in mind, the following stocks are expected to bounce back once the global economy stabilizes, making them a potentially great bet for speculative investors.

Microsoft (ticker: MSFT)

This is one of the best blue chip stocks to own despite its stagnancy over the past couple of months. The company issued a better-than-expected revenue report for the September quarter. Earnings per Share reached $2.35, beating the EPS expectation by 4 cents. Revenues hit $50.1 billion, surpassing Wall Street expectations of $49.7 billion.

Despite this good performance, investors are looking for more from Microsoft. Wall Street set expectations for the company’s Dec quarter guidance at $56.1 billion. However, in December, the company expects a performance closer to $52.4 billion and $53.4 billion.

As a result, Microsoft shares will likely remain cheap and are currently near their 5-year low based on the P/E ratio.

Their cloud product, Azure, is at the core of the company’s problems. Revenue received from the firm’s intelligent cloud segment hit $20.3 billion in the quarter. The results fell short of issued guidance that stood at $20.6 billion. Although this seems like an inconsequential issue, it has made the company shares cheap.

Starbucks (ticker: SBUX)

This stock currently trades at $99, close to its 52-week range of $68.39 to $117.80. Investors and analysts alike seem conflicted about this stock performance. Analysts who rate the stock ‘Buy’ are 13, while 18 give it a ‘Hold’ rating. This disparity in ratings makes it challenging to accurately understand the company’s performance.

Possible issues affecting the company stock include unionization efforts and concerns that this will result in lower profitability moving forward. Additionally, the company operates 6,000 stores in China, which opens it up to the country’s policy on international brands operating in China.

There is concern that President Xi’s third term will affect the company’s operations as the country continues implementing its zero Covid policies. Enthusiastic investors should pay attention to the company’s increasing quarterly dividend as it matures.

Black text saying Blue Chip Stocks at 52 Week Low SOMETHING TO WATCH OUT FOR with the logo of dontbefooltrading

Home Depot (ticker: HD)

Another stock worth considering at current prices is Home Depot which is trading just above $297. With a housing market in sharp decline, Home Depot might still have strong headwinds ahead. Additionally, the rate of inflation could also negatively impact the stock further.

An interest rate hike would lead to increasing mortgage rates and fewer home purchases. However, this being the world’s largest home improvement chain could give speculative investors hope that this stock will stage a massive comeback in the future. In emphasis of this, the company posted its highest-ever sales and earnings figures in Q2 and also managed to achieve its fiscal guidance for 2022.

Johnson & Johnson (ticker: JNJ)

Johnson & Johnson beat Wall Street revenue expectations of $23.4 billion, hitting sales of $23.8 billion. Earnings Per Share were at $2.55, higher than the expectation of $2.48. This blue-chip stock dropped quite a distance from its 52-week low of $155, then recovered slightly to $177.24.

According to the company, the reasons for its good performance include easing hospital staffing crunches that affected medical device sales in previous quarters. Reports suggest that elective procedure volumes are restoring to normal levels. The company also witnessed pharmaceutical sales increase by 9.2% and consumer health up by 4.8%.

The company is currently in a healthy position with $34 billion cash on hand. This will give them a lot of leverage in the future as they recover amidst a challenging global economic environment.

Cisco Systems (ticker: CSCO)

Investors interested in profiting from the dip in blue chip stocks would do well to look at Cisco systems. The stock still isn’t far from its 52-week dip of $38.60. There remains strong evidence that the stock is underpriced, owning to its long-term fundamentals.

The company remains in a relatively strong market position, with its operating and gross margins at 95% better than all its competitors. This can be attributed to its sheer scale in the market. The company’s metrics beat other hardware industry competitors at almost every level.

Despite the current economic challenges, the company is expected to maintain a strong footing as smaller competitors fail to keep up with its scale advantages. Additionally, Cisco bears a dividend yield of 3.14%, which is high for a tech firm.

Cisco posted strong Q2 results, surpassing Wall Street expectations, with revenues hitting $13.1 billion, ahead of the $12.73 billion expectation.

Alphabet (Ticker: GOOG, GOOGL)

After posting weak Q3 earnings, this stock is in trouble by all accounts. Alphabet witnessed a major revenue decline across all its core businesses. The company’s ad revenue stood at $54.48 billion, which stood below the expected $56.9 billion. YouTube ad revenue fell short of the $7.5 billion expected and landed at $7.07 billion. The only saving grace was Google cloud, with a revenue report was $170 million above the expected $6.7 billion.

Ultimately, Alphabet is an advertising firm, which makes the weak results look even worse. Some investors would question why they should remain optimistic about the company amidst continuously declining ad spending.

The answer is simple; despite the weak ad revenue, the industry itself is expected to hold and even increase in the future. Markets are optimistic, especially now that Q3 earnings are a figment of the past.

Accenture (ticker: ACN)

This stock currently isn’t far from its 52-week low of $242.95 and is a blue-chip stock that investors ought to consider.

The company presents a fantastic opportunity to get in while it’s relatively low and potentially win big in the future. It reported full fiscal year earnings in late September that indicated strong growth. Its Q4 revenues hit $15.4 billion, indicating a 15% increase on a year-over-year basis. Accenture’s revenues for the full year hit $61.6 billion.

Overall, the company had a strong year, although its disappointing Q2 earnings caused hesitation among investors. The company expects to produce revenue growth within the range of 10% to 14% in Q1’23. This should keep investors interested in the company’s future. Additionally, the company’s history of paying dividends to its shareholders might be an added incentive. The company paid $2.46 billion in dividends during the fiscal year and repurchased shares worth $4.12 billion.

In conclusion, investors stand an excellent opportunity to gain by buying blue-chip stocks while they are down, with the expectation that they will regain their glory in the market in the near future. Blue-chip giants such as Microsoft, Home Depot, Starbucks, and others that experienced a 52-week drop still likely represent a fantastic investment opportunity.

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