For those looking for stocks to buy, now’s an exciting time. With markets having sold-off due to uncertainty over Donald Trump’s tariffs, many top stocks are now ‘on sale’.
Here, I’m going to highlight three world-class stocks that are currently trading 20% or more below their highs. I think these shares are worth considering today.
Alphabet
Let’s start with Google and YouTube owner Alphabet (NASDAQ: GOOG). Because this stock looks really cheap right now. Down 27% from its 52-week high, it’s currently trading on a forward-looking price-to-earnings (P/E) ratio of just 17.8. That’s very low for a ‘Magnificent 7’ stock.
Of course, Alphabet’s more sensitive to economic conditions than some of the other Big Tech companies. If businesses reign in their advertising spending, its revenue and earnings growth could stall.
And that’s not the only risk here. Another is disruption to its business model from new generative AI apps like ChatGPT.
This company has plenty of growth levels it can pull however (for example, it could charge customers more for Google Drive). And in the long run, I see plenty of potential from YouTube, cloud computing, and self-driving cars.
So I think it’s worth a look today.
InterContinental Hotels Group
Turning to the FTSE 100, I like the look of InterContinental Hotels (LSE: IHG). It was trading near 11,000p back in February however, it’s now hovering around 7,900p – about 28% lower.
At that price, the P/E ratio is in the low 20s. I think that’s attractive given this company’s brands (InterContinental, Holiday Inn, Kimpton, etc) and very profitable, franchise-based business model.
It’s worth pointing out that in the near term there’s uncertainty here. Consumers are a little on edge right now, and they may reign in their spending on travel over the next 12 months.
Taking a five-to-10 year view however, I expect this company to do well on the back of the retirement of the Baby Boomers, rising incomes in emerging markets, and the general growth of the travel industry. Over time, I expect it to get much bigger so is worth considering.
Scottish Mortgage Investment Trust
Finally, I like the look of Scottish Mortgage Investment Trust (LSE: SMT) at the moment. It’s a growth-focused product that offers exposure to growth industries such as e-commerce, artificial intelligence (AI), self-driving cars, and space technology.
Back in February, its shares were trading near 1,130p. Today however, they can be snapped up for around 900p – about 20% lower.
Now, this investment trust could be volatile in the short term. At present, stocks in industries such as AI are under quite a bit of pressure. But taking a long-term view (as we always do at The Motley Fool), I think it will do well. Let’s face it – the world’s expected to become even more digitised in the years ahead.
This means that the industries I mentioned above are likely to get much bigger. With exposure to companies such as Amazon, Nvidia, and Meta Platforms, this trust is well positioned for the future, in my view and worthy of a closer look.
