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

October 2024 was a fairly quiet month on Wall Street. The major market indices demonstrated remarkable resilience, remaining within 3% of their starting values throughout the month, even as economic uncertainty loomed and the nation navigated a nerve-wracking election cycle. However, the stock market, particularly in its more growth-oriented and volatile sectors, is anything but dormant. Among the 101 stocks in the NASDAQ-100 index, only four managed to gain over 10% in value, while a concerning dozen witnessed double-digit price declines. In light of these sharp price drops, the pressing question arises: should investors consider these stocks as potential buying opportunities, or are they merely flashing caution signals? Let us dissect some of the worst-performing stocks from October.

NASDAQ-100 Stock Performance Overview

Healthcare Sector Analysis

Regeneron Pharmaceuticals

Regeneron experienced a significant decline following the release of third-quarter results that, while exceeding analyst estimates, fell short of investor expectations and triggered a price correction. Although Regeneron possesses a robust pipeline of drug candidates, its flagship product, Eylea, is increasingly losing competition to emerging alternatives and biosimilars. With the recent downturn, Regeneron could be flashing a value signal, warranting a closer look for investors willing to navigate the complexities of the pharmaceutical sector.

IDEXX Laboratories

IDEXX has rolled out its results amid similar skepticism to Regeneron. Although the company met consensus estimates for earnings per share, it lagged in revenue generation. Weak performance in the livestock segment raised alarm bells, even as the pet product category showed promising sales growth. Investors should carefully consider whether the valuation still holds merit given the mix of results and the heightened scrutiny of the livestock business.

Moderna

Moderna, the once high-flying vaccine pioneer, continues to stumble, enduring a prolonged decline without any recent earnings report to buoy investor sentiment. The surge from COVID vaccinations has dissipated, and the introduction of seasonal vaccines has been tepid. With critical patent-infringement lawsuits looming and a faltering pipeline, the outlook appears grim. The prudent takeaway here is that risks with Moderna outweigh any potential rewards.

Technology Sector Woes

Super Micro Computer

Supermicro, a builder of server systems, finds itself embroiled in a potential accounting scandal. A bearish report from a short-seller sparked fears about the accuracy of its financial reports, resulting in an overdue annual report and an ongoing Justice Department investigation. Given this volatility, and with competitors like Dell offering a less tumultuous narrative, Supermicro requires careful examination before any investment consideration is made.

ASML Holding

Moving to the semiconductor sector, ASML Holding also revealed disappointing results. Despite the positive buzz surrounding AI technologies, ASML’s third-quarter report reflected weak orders and a cool market outlook. As semiconductor firms deliberately take a pause before ramping up infrastructure investments, the perceived slowdown presents a cautionary tale for investors. A steeper drop in ASML’s stock price might be necessary before considering an entry point.

Conclusion

In summary, the fallout from October’s pricing declines in the Nasdaq-100 stock space certainly opens up discussions around potential buying opportunities. However, candidates such as Supermicro, Regeneron, IDEXX, Moderna, and ASML exhibit more red flags than clear paths to recovery. These stocks require diligent research and an understanding of their respective industries to assess their true potential for a comeback. For those with a conservative investment strategy, it may be wise to remain cautious before diving into any of these slippery waters.