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The stock market may be near all-time highs, but it’s not champagne and caviar for every company or its shareholders. Many stocks are deep in the red this year despite gains in the indices. That’s especially true for tech stocks. While big-name mega-cap names like Meta-platforms (NASDAQ:META) are up, but many smaller tech stocks are struggling to cope in this market.
Some tech stocks are struggling due to self-inflicted wounds and poor financial results. However, issues ranging from high interest rates and geopolitical conflicts to poor analyst ratings and negative investor sentiment are also weighing on stock prices and hurting stocks. The good news for investors is that many tech stocks are now available at bargain prices, providing opportunities for bottom-fishing.
So, let’s take a closer look at this tech sector shorting of three must-have stocks at record lows.
Paramount Global (PARA)
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It looks like there might finally be a deal that will see a private production company Skydance Media acquire the streaming giant Paramount Global (NASDAQ:PARA). Skydance Media is expected to pay $1.75 billion to acquire National Amusements, the parent company of Paramount Global, and then merge the two entertainment companies, according to media reports. The news sent PARA stock up 7%.
Although Paramount’s stock has received a boost, its price is still down 20% year-to-date (YTD). The long-term losses for Paramount Global stock are even deeper. The company’s stock is trading 78% lower today than it was five years ago. Management is trying to turn things around beyond the potential deal with Skydance Media. It’s exploring streaming joint ventures with other media companies. It may also eliminate $500 million in costs and divest non-core assets. In addition, paying down $15 billion in long-term debt is a top priority.
While not without risks, PARA stock could be a good buy for bargain hunters. This is especially true as the company remains a potential acquisition target.
Shopify (Store)
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E-commerce business Shopify (NYSE:SHOP) is another potential buy. Its stock is down 11% this year and 62% below its all-time high in November 2021, at the height of the pandemic. Most recently, SHOP stock fell nearly 20% after the company reported a surprise loss for its fiscal first quarter. Shopify reported a loss of 21 cents per share. That was much worse than the 9 cent profit analysts had expected.
The financial loss in the first fiscal quarter was attributed to the sale of Shopify’s logistics business and related costs the company incurred in the sale. Looking ahead, Shopify said that for the second fiscal quarter, revenue will grow at a percentage rate of 15% compared to the prior year (ACTUALLY). Analysts had predicted a 19% increase in sales in the second quarter. In late June, Shopify also announced its partnership with discount retailer Target (NYSE:TGT) on a third-party online marketplace.
Businesses that work with Shopify can now apply to join “Target Plus,” the retailer’s third-party marketplace. The deal with Target gives Shopify customers a broader consumer base to tap into. For Target, the deal adds new and diverse products and brands to its online marketplace. Financial terms of the deal have not yet been disclosed.
BlackBerry (BB)
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Investors who are really looking to fish the bottom in a hapless tech stock should consider Blackberry (NYSE:BB). The former smartphone maker turned IoT company has seen its stock price fall 53% over the past 12 months. This is due to a series of poor earnings reports.
BB’s stock is 98% below its all-time high set in 2008, when the company was still making wearables. At less than $2.50 per share, BlackBerry is now trading like a penny stock. More recently, BlackBerry reported that its net loss in the first quarter of this year widened by nearly 300%, as sales continued to deteriorate. Revenue was down 61% from a year earlier. BlackBerry is preparing to split its cybersecurity and IoT divisions to cut costs.
While this stock may not be for investors with weak stomachs, it could rise if management can get its house in order. Plus, BlackBerry has become a popular meme stock, so its share price is likely to rise whenever this basket of stocks rises.
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As of the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.
As of the date of publication, the responsible editor did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Joel Baglole has been a business journalist for 20 years. He worked for five years as a reporter for the Wall Street Journal and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
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