5 Nasdaq Value Stocks To Buy Cheap

As if the worst first five-day start to a year was not enough, Friday’s slump dragged the major benchmarks to the worst-ever first 10-day start to a year. Though the Nasdaq has less exposure to the energy sector, dampened investor sentiment led by the continued slump in oil prices are affecting the performance of the tech-heavy index this year.

China-led global growth worries are also not sparing the benchmark, which is down nearly 5.7% since the start of 2016. And to top it all, the Intel stock dealt an unprecedented blow to the index in spite of the fourth-quarter earnings beat.

In this backdrop, investors may find it profitable to invest in the Nasdaq components with strong fundamentals that are now available at discounted prices due to the sell-off.

Lingering Concerns 

If persistent slump in oil prices and a weak Chinese economy are the main market culprits of this year, some recently released disappointing economic data on the domestic front are also to be blamed.

Coming to the first issue, rising expectations on the lift-off of Iranian sanctions, which happened yesterday, dragged down the energy sector, which in turn weighed on the benchmarks on Friday. While West Texas Intermediate (WTI) crude plunged 6.1% to a 12-year low level of $29.42 per barrel, Brent crude declined nearly 0.1% to $31.01 a barrel. 

Chinese disappointing data on new bank loans also increased concerns regarding the already weak economy. Official data showed that the volume of new loans in December translated to 597.8 billion yuan ($90.7 billion), down from November’s tally of 708.9 billion yuan. It is speculated that sluggish economic growth conditions and a sharp increase in bad debt had a negative impact on business activities last month, which in turn affected the volume of new loans.

Matters were made worse by discouraging domestic economic data that cast a pall over the markets on Friday. The New York Empire State Index – an important indicator of manufacturing activity – plunged from negative 6.2 last month to negative 19.4 in January – incidentally, the lowest level since Apr 2009. The Federal Reserve reported that industrial production declined for the third-consecutive month in December by 0.4%. Production reportedly dropped at an annual rate of 3.4% last quarter. The retail space too was affected with sales declining 0.1% in December, raising concerns over consumer spending.