Are you looking for beaten-down growth stocks to buy on the dip? If so, there are many opportunities you can take advantage of right now. Yesterday, growth stocks (and stocks in general) took a major dip after Federal Reserve Chair Jerome Powell commented that he would take interest even higher than he originally planned to. This move spooked the markets because higher interest rates make stocks, especially growth stocks, less valuable.
The higher interest rates go, the less sense it makes to take on risky investments. Why take a risk when you can get so much more return risk-free? Indeed, this whole situation is a pretty big conundrum for North American technology growth stocks. However, if you look at growth stocks in sectors other than tech, opportunities are there.
In this article, I will explore three growth stocks down 23-50% that may be worth buying and holding for a long period of time.
EQB (TSX:EQB) is a cheap Canadian bank stock that trades at a mere 8.2 times earnings. Banks in general are cheaper than other types of stocks, but EQB is even cheaper than most banks. Despite its cheapness, EQB has pretty good growth.
In its most recent quarter, EQB’s earnings increased by 7%, while its customer count increased by 23%! That might not sound like spectacular growth, but it’s actually quite above average for the 2022/2023 period. This year has seen many tech stocks deliver negative earnings growth and most bank stocks deliver only low double-digit earnings growth. So, EQB is doing better than its sector and far better than the market.
At today’s prices, EQB has a 2.5% dividend yield and a mere $1.5 billion market cap. So, the ceiling on this stock’s performance is quite high.
PDD Holdings (NASDAQ:PDD), aka Pinduoduo, is a Chinese growth stock that I started buying earlier this year. It is well known for its rapid growth, particularly in the U.S. market.
In its most recent quarter, PDD Holdings grew its revenue 65% and its earnings by several hundred percentage points. That success was largely due to a successful expansion into the U.S. market. In September of 2022, PDD launched Temu, a U.S. version of the Pinduoduo Chinese shopping app. Thanks to an aggressive ad campaign, Temu rapidly soared to the top of the U.S. app store charts, possibly contributing to PDD Holdings’s strong third-quarter growth.
Temu has launched in Canada as well; I placed an order for a shirt and socks on the app. Unfortunately, my package was delayed, but a friend who I referred to Temu reported that she got hers relatively quickly.
Taiwan Semiconductor Manufacturing (NYSE:TSM) is another foreign growth stock I started buying this year. I bought it after hearing that Warren Buffett bought it in the third quarter.
TSM is a semiconductor company (a company that makes computer chips). It manufactures an astounding 60% of the world’s computer chips! It has a few competitors, but they don’t have anywhere near the same market share.
In its most recent quarter, TSM’s revenue grew 43% in Taiwanese dollars, or 27% in U.S. dollars. It was a pretty good showing, and TSM expects this year’s growth to be positive, albeit slower, than last year’s growth.