DDOG - Citi Research: 20 stocks on pullback to consider for long-term investing

2023-09-25 13:24:51 ET

Twenty declining stocks on the Russell 1000 Growth Index ( NYSEARCA: IWF ) ( VONG ) that might have a stable outlook and medium-term free cash flow growth have been added to Citi Research’s Viewpoint strategy to buy, the brokerage reported on Friday.

The stocks are Las Vegas Sands ( LVS ), Teradata ( TDC ), Datadog ( DDOG ), TKO Group Holdings ( TKO ), Lockheed Martin ( LMT ), Bruker ( BRKR ), DraftKings ( DKNG ), Insulet ( PODD ), Pinterest ( PINS ), Chipotle Mexican Grill ( CMG ), Netflix ( NFLX ), HubSpot ( HUBS ), Lam Research ( LRCX ), Rockwell Automation ( ROK ), MongoDB ( MDB ), Apple ( AAPL ), KLA Corporation ( KLAC ), Paycom Software ( PAYC ), NVIDIA ( NVDA ), and Intuitive Surgical ( ISRG ).

Those are stocks that have been rated as “Buys” by Citi Research, have at least 76% of the market cap assigned to Growth style, have a decline of 10% or worse from year-to-date highs after March 31, have free cash flow per share estimates above March 31 levels, and have FY5 free cash flow per share estimates that are within or above market-implied estimates.

The Russell 1000 Growth Index ( IWF ) ( VONG ) has sold off over 6% from the high of mid-July, the research report said. Two-thirds of stocks have underperformed by at least 10% from year-to-date highs, and a third is down more than 20% from YTD highs.

Free cash flow expectations have improved slightly over the past three months (from $75.09 to $75.43), the report said, with expectations for earnings per share unchanged for six months (in the $75–$76 range).

“We see much more of a drawdown dynamic under the surface than the Russell 1000 Growth Index price action would suggest,” the report said.

More on the Russell 1000 Growth ETF:

• Seeking Alpha’s Quant Rating on iShares Russell 1000 Growth ETF
• IWF: Near The End Of Growth Rotation?
• Stocks Get A July Jolt, New Leadership Emerges, IWF A Hold

For further details see: