Is It Time to Buy October’s Worst-Performing Nasdaq Stocks?

Overview of October Performance

October 2024 turned out to be quite an uneventful month on Wall Street. The major market indices hovered within a tight 3% range of their starting values, despite a backdrop of economic uncertainty and an electrifying election cycle. However, don’t let this volatility lull you into complacency—within the high-stakes environments of growth stocks and the Nasdaq-100 index, the drama continued. Out of the 101 stocks in the Nasdaq-100, only four managed a notable rebound, gaining over 10% for the month. In stark contrast, 12 stocks suffered double-digit declines—these dips could signal opportunities for savvy investors but could also highlight serious red flags. So, which of these stocks should we pay attention to as potential buying opportunities? Let’s break it down.

October’s Biggest Losers

Here are some of the worst performers within the Nasdaq-100 this past October:

Sinking Healthcare Stocks

Regeneron Pharmaceuticals

Regeneron’s steep decline follows a third-quarter report that, while beating analyst expectations, prompted a dramatic price correction. They boast a robust pipeline of drug candidates, yet their flagship treatment, Eylea, is losing turf to newer alternatives and biosimilars. Prior to this earnings report, Regeneron was on the radar as a potential stock-split candidate, but now it poses as a value play in a turbulent sector.

IDEXX Laboratories

IDEXX reported in October, only to face skepticism from the market. They met consensus earnings estimates but missed revenue targets. The company kicked off 2024 victoriously, only to see its gains vanish by the end of October. While their pet products show promise with a 6.5% yearly sales growth, challenges in their livestock sector raise concerns. Despite the recent dip, IDEXX remains at a high valuation, making it a less tempting buy.

Moderna

Advanced-vaccine powerhouse Moderna is coming off a challenging stretch without any earnings announcements in October; the stock simply continues its painful decline. The COVID-19 vaccination surge has fizzled, and the demand for seasonal vaccines remains tepid. With several looming patent-infringement lawsuits, the risk-to-reward ratio here does not favor potential buyers.

Struggling Technology Leaders

Super Micro Computer

Super Micro Computer takes the lead for the steepest drop, stemming from potential accounting controversies and a bearish analyst report. Their fiscal year 2024 annual report is delayed, a Justice Department investigation looms, and trust in their reported finances has dwindled. Supermicro’s stock is plummeting at a time when competition is fierce—companies like Dell (NYSE: DELL) provide similar services without the public relations nightmare.

ASML Holding

ASML’s October performance also begs for attention. The semiconductor giant disclosed a softer order book and lowered expectations in its latest quarterly results. The anticipated AI-driven sales surge has yet to materialize, as their biggest customers hesitate to ramp up infrastructure investments. Until ASML provides a steeper discount or presents a clearer roadmap toward recovery, it’s wise to look elsewhere for AI plays.

Conclusion: To Buy or Not to Buy?

As we sift through the wreckage of October’s worst performers in the Nasdaq-100, many are left pondering whether it’s time to dive into these beaten-down stocks. From the healthcare sector to technology firms, the consensus remains cautious. While prospecting for value in fallen giants is tempting, it’s crucial to evaluate the inherent risks involved. Skimping research or rushing into purchases could lead you into a deeper pit than you anticipated.

Before making any move, ensure you’re armed with a sound strategy and updated information. Continue to monitor the charts, trends, and broader market conditions, and you might just find hidden gems lurking where others see rubble.