This week’s sell-off was fueled by economic concerns in the financial sector following the collapse of SVB Financial Groups (SIVB) Silicon Valley Bank.
However, the broader sell-off in the markets creates opportunities, and here are three stocks that investors should keep an eye on.
Sales force (CRM)
We start the list with a Zacks Rank #1 (Strong Buy) as Salesforce’s stock is very exciting at the moment. After crushing its Q4 top and bottom line expectations last week, Salesforce stock had enjoyed some nice momentum.
The wrench thrown on the rally by broader economic concerns may offer investors a better buying opportunity. Furthermore, a small correction can be healthy and provide long-term support.
In addition, revisions to earnings estimates have been on the rise following Salesforce’s stellar fourth-quarter results. This should continue to be a catalyst for Salesforce shares after the smoke clears from this week’s market decline.
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During the quarter, Salesforce’s earnings estimates for fiscal year 2023 and FY24 have now increased by 23% and 29%, respectively. Earnings for 2023 are now expected to rise 33% and jump another 26% in FY24 to $8.75 per share.
Even better, Salesforce stock is still up +31% year-to-date to largely outperform the S&P 500’s +2% and the Nasdaq’s +6%.
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Sterling Infrastructure (SIZE)
Next is Sterling Infrastructure, which has a Zacks Rank #2 (Buy) and also got some nice momentum after the company recently announced it was awarded a site development project for Hyundai’s EV battery plant.
This is on top of stellar growth in 2022 with earnings estimate revisions continuing to trend higher for fiscal 2023. Sterling’s earnings are now expected to jump 11% in FY23 and rise a further 16% in FY24 to $4.07 per share.
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Sterling shares are still up +18% year-to-date to largely outperform the broader indices, and its attractive valuation and excellent performance over the past few years indicate there could be more upside ahead.
Shares of STRL trade at $38 and just 11.6X forward earnings, which is well below the industry average of 19.9X and the S&P 500’s 17.9X. Plus, Sterling shares are trading much more reasonably than its decade high of 298.8X and at a slight discount to the median of 12.6X.
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EPR properties (EHR)
Rounding out the list is EPR Properties, which also has a Zacks Rank #2 (Buy). Many REITs are becoming attractive following the massive sell-off in the broader financial sector, and EPR’s stock may be worth considering for its attractive valuation, diversified portfolio and lucrative monthly dividend.
EPR’s properties include megaplex theaters, entertainment retail centers, lodging properties and early childhood education centers, among others.
Trading 33% off its 52-week highs, EPR’s valuation is starting to stand out. EPR trades at $37 per per share and 8X forward earnings, which is well below the industry average of 12.5X and the benchmark.
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EPR is also trading 68% below its decade high of 25.2X and at a 40% discount to the median of 13.2X. In addition to this, EPR’s 8.44% yield blows REIT and Reality Trust – Retail Markets 4.22% and the S&P 500’s 1.62%.
This should certainly support patient investors and income seekers as EPR shares are down -9% YTD but are very enticing at their current levels.
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Bottom line
Salesforce, Sterling Infrastructure and EPR Properties shares look like strong buy-the-dip candidates after this week’s selloff. There could be plenty of upside ahead for these stocks as volatility eases and we return to what hopefully continues to be a bullish year for many stocks.
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Salesforce Inc. (CRM): Free inventory analysis report
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.