Many investors are looking to add a few beaten-down growth stocks in the technology sector to their portfolios.
Sean Udall, the tech stock strategist and the publisher of The Udall Report, shared a pair of stocks with PreMarket Prep to put on the watchlist.
Paypal Holdings Inc (NASDAQ:PYPL): The issue peaked in July at $310.16 and made a new low for the move in Friday’s session at $121.40 and has rebounded back to the $125 level as of 2 p.m. EST.
Udall has been eyeballing the issue closely since $180, figured it may get to $150, and here it is in the mid-$125 handle.
His thesis is simple. After a poor fourth quarter and lower guidance, Udall said the company has set a really low bar for itself for the first quarter and for the remainder of 2022.
"They provided really low guidance that will enable them to beat for three quarters in a row," he said.
Block Inc (NYSE:SQ): For pattern traders, this issue has a potential double bottom in place. In Thursday’s session, the issue bottomed at $100.04, and in Friday’s session it bottomed just below that level at $99.81.
As of 2 p.m. EST it has posted a solid rebound to the $108 area.
Udall had been a former investor at the $40 area back in March meltdown in 2020.
“Many investors believe that there is something wrong with PayPal and that competriors are coming after them, and Block Inc, is one of them,” Udall said.
"Everyone is worried about the growth really slowing down for the company. I do not."
His dream price in Block stock is $85, but Udall does not think it will get that low.
In fact, he said the $100-$105 area is attractive. Udall would like to see some of the payment companies produce some really poor numbers and take Block along for the ride lower.
As a result, you may have a similar scenario to what occurred this week with Meta Platforms Inc (NASDAQ:FB), did to Snap Inc (NYSE:SNAP) and Pinterest Inc (NYSE:PINS), he said.
The full discussion with Udall from Friday’s PreMarket Prep Plus interview can be found here: The segment with the aforementioned issues begins at the 13:45 mark.
Photo courtesy of Block.
