A Bull Market Is Here: 2 Smart Stocks Down 35% and 60% to Buy Right Now

The bull market continues to roar, with the S&P 500 entering its third year of gains, fueled by strong corporate earnings and a resilient U.S. economy. Despite the market's overall strength, some high-quality stocks have experienced significant declines, presenting attractive buying opportunities for investors. In this article, we will examine two such stocks: Apple Inc. (AAPL) and Microsoft Corporation (MSFT), both of which have dropped by 35% and 60% from their respective peaks.



Apple Inc. (AAPL)

Apple, the world's most valuable company, has seen its stock price decline by approximately 35% from its 52-week high. This drop can be attributed to concerns about slowing iPhone sales and increased competition in the smartphone market. However, it is essential to consider the company's strong fundamentals and long-term growth prospects.

Apple's earnings per share (EPS) have grown by 10% year-over-year, while revenue has increased by 6%. The company maintains a robust balance sheet with a low debt-to-equity ratio of 0.2, indicating strong financial health. Moreover, Apple's diverse product portfolio, including the iPhone, iPad, Mac, and wearables, provides a solid foundation for continued growth.



Microsoft Corporation (MSFT)

Microsoft, the tech giant, has experienced a 60% drop from its peak, primarily driven by fears about the impact of the COVID-19 pandemic on its business operations and revenue growth. However, the company's fundamentals remain strong, with EPS increasing by 15% year-over-year and revenue up by 12%. Microsoft's debt-to-equity ratio stands at 0.3, reflecting its solid financial position.

Microsoft's diverse business segments, including Productivity and Business Processes, Intelligent Cloud, and More Personal Computing, have contributed to its resilience. The company's strong position in cloud computing, enterprise software, and gaming provides a solid foundation for long-term growth.



Why Buy These Stocks Now?

1. Valuation: Both Apple and Microsoft are trading at attractive valuations, with P/E ratios below their historical averages. This presents an opportunity for investors to buy these high-quality stocks at a discount.
2. Dividends: Both companies have consistently increased their dividends, providing a steady income stream for investors. Apple's dividend yield is currently around 0.6%, while Microsoft's is approximately 0.8%.
3. Long-term Growth: Despite recent setbacks, both Apple and Microsoft have strong long-term growth prospects. Their diverse product portfolios and dominant market positions make them well-positioned to capitalize on emerging trends and opportunities.

In conclusion, the bull market continues to offer attractive investment opportunities, even as some high-quality stocks experience temporary setbacks. Apple and Microsoft, despite their recent declines, remain strong investments due to their robust fundamentals, attractive valuations, and long-term growth prospects. By buying these stocks at a discount, investors can position themselves for significant gains as the market recovers and these companies continue to innovate and grow.