The market’s sentiment reversal is removing the premium in over-priced stocks. Investors could bet on stocks like Unity (U), C3.ai (AI), or nCino (NCNO) bouncing back. While Unity has strong prospects, the latter stocks are lower for a reason. They still trade at unreasonable valuations and did not post good quarterly results.
After negative headlines involving Activision (ATVI) and its CEO, ATVI stock selling accelerated. The P/E is in the teens, ignoring the cash flow strength from its hit titles like Call of Duty. Still, the company said on Nov. 2 that it would delay the Overwatch 2 and Diablo IV launch.
ViacomCBS (VIAC) peaked at $100, due exclusively to Ex-Tiger Asia manager Bill Hwang betting big on the stock. He eventually dumped the stock after a margin call. The entertainment firm is building its streaming channel and trades in the single-digit P/E range.
DocuSign (DOCU) lost 42% of its value on Dec. 3 after posting earnings of just 58 cents a share on revenue of $545.5million. It warned that customers returned to normalized buying patterns. This ended the streak of six quarters of accelerated growth. DOCU stock is not a relative bargain yet. Add this stock on the watch list for now.
