stocks have fallen very much 2022. If you’re wondering where the market bottom is, JPMorgan has some good news.
The bank sees companies continuing to buy back shares, which could help the stock market bottom.
“In the recent sell-off, JPMorgan estimates that repo executions were 3-4x above trend, implying that corporate puts remain active,” wrote JPMorgan’s Marko Kolanovic.
The analyst noted that S&P 500 companies have announced up to $429 billion in share buybacks in 2022. And as businesses continue to rush cash, more buybacks could be on the way.
If you agree with that sentiment and want to buy the dips at market bottoms, JPMorgan sees these three stocks as particularly attractive.
ChargePoint Holdings (CHPT)
Electric cars are hot. ChargePoint Holdings is well positioned for the electric vehicle boom.
The company has one of the largest electric vehicle charging networks in the world. It has approximately 5,000 commercial and fleet customers, including 76% of Fortune 50 companies. Since its inception, ChargePoint has delivered more than 105 million charging sessions.
Of course, EV stocks haven’t been a market darling lately, and this EV infrastructure has been caught in a sell-off. Shares of ChargePoint have fallen 48% over the past 12 months.
This might get the bargain hunter thinking.
In the fiscal year ended Jan. 31, ChargePoint generated $242.3 million in revenue, up 65% year over year. This was driven by a 90% increase in network charging revenue and a 32% increase in subscription revenue.
JPMorgan analyst Bill Peterson has an “overweight” rating on ChargePoint with an $18 price target, which is about 34% above the stock’s price today.
Shares of Nvidia, the leading graphics card maker, have experienced a strong bull run over the past decade. But that rally came to an abrupt end in November 2021. The stock has fallen about 45% since peaking at $346 in late November.
Even compared with other battered stocks in the semiconductor industry, Nvidia is down sharply.
Nvidia’s business is doing well, making it the interesting contrarian idea. The chip maker generated $8.29 billion in revenue in the fiscal first quarter. The amount increased by 46% year-on-year and also set a new quarterly record.
Gaming revenue rose 31% year over year to a record $3.62 billion. Meanwhile, data center revenue surged 83% to a record $3.75 billion.
JPMorgan analyst Harlan Sur recently cut his price target on Nvidia to $285 from $350. However, Sur maintained an Overweight rating on the stock, with the new price target still implying a potential upside of 51%.
Magellan Midstream Partners (MMP)
Unlike the first two, Magellan Midstream Partners isn’t a stock out of favor. It’s actually up 9% so far this year, outperforming the broader market.
It’s easy to see why Magellan is getting positive attention these days. The energy sector is going all out, and Magellan’s midstream business is well-positioned for this commodity cycle.
The partnership has 9,800 miles of product pipelines, 54 connection terminals and two offshore storage terminals. It also has approximately 2,200 miles of crude oil pipelines and storage facilities with a total storage capacity of approximately 39 million barrels.
Magellan is a name Deserving Attention for Income Investors, also. The partnership pays a quarterly distribution of $1.0375 per unit, which translates into a lucrative annual yield of 8.1%. Management expects Magellan to generate enough cash to cover its 1.24x payout this year.
Last week, JPMorgan analyst Jeremy Tonet upgraded Magellan to overweight from neutral. He also raised his price target to $57, implying a potential upside of 12%.
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This article is for information only and should not be considered advice. It does not provide any kind of guarantee.