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What to Do During 2022's Stock Sell-Off

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·3-min read
In this article:
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  • (1:15) - A Break Away From The Market: Can You Ignore The News?

  • (6:30) - Making A Plan For Market Corrections And Down Markets

  • (16:40) - Is The Market Signaling For A Recession Ahead?

  • (23:40) - Are We Nearing The Bottom Of The Sell Off?

  • (30:55) - The Cathie Wood Strategy: Should You Be Buying More?

  • (34:55) - Episode Roundup: NVDA, SHOP, SQ, TGT, TSLA, CRMT, PXD



Welcome to Episode #315 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week, Tracey is joined by Zacks Senior Stock Strategist, Kevin Cook, to talk about 2022’s market sell-off and what investors should do.

Do You Have a Plan?

Kevin and Tracey have always been about having a “plan.” One way to control your emotions is to have trailing stops on your big winners which automatically sell, and locks in the gains, on a big stock sell off.

Your trailing stop could be 25%, 20% or 15%. You could go with whatever you are comfortable with.

But what if you didn’t have a plan and now you are sitting on a portfolio that has seen big declines?

Should investors dollar cost average like ARK Investment’s Cathie Wood is doing?

What about owning the “hot” sectors like energy? Is it too late to buy?

5 Popular Stocks: What to do now?

1.       Target TGT

Target was an investor favorite during the pandemic as it seemed like the company was doing everything right. But a cut in earnings guidance this year has pushed Target shares down 33% in 2022. Target shares now trade in “value” territory with a forward P/E of 13.5. It also pays a dividend, yielding 2.4%. Is Target oversold?

2.       Block SQ

Block shares have taken a beating in 2022, falling 52%. But earnings are also expected to fall 42% in 2022. The Zacks Consensus is looking for $0.92 when Block made $1.71 last year. Sales are expected to rise just 1.9% in 2022. Is Block a deal after the sell off or is there still more downside to come?

3.       Shopify SHOP

Shopify has been one of Kevin’s favorite stocks. Shares are down 75.8% year-to-date. Shopify missed big on earnings in the first quarter, however, and earnings are expected to fall 52.4% in 2022. If you liked it at $1700, should you buy Shopify at $325?

4.       Tesla TSLA

Tesla was also a big pandemic winner but shares are down 37.3% in 2022. It still trades with a forward P/E of 56 but Tesla investors have never cared about valuation. Sales are expected to rise 60.1% in 2022 and earnings look equally bullish, up 64.9%. Is this a buying opportunity in a popular growth name like Tesla?

5.       Pioneer Natural Resources PXD

Pioneer Natural Resources is one of the big oil and natural gas companies in the Permian Basin. It’s the only stock on this list which is up in 2022, gaining 52.8% and trading near 52-week highs. Pioneer Natural Resources shares are still cheap, with a forward P/E of only 8, because earnings are expected to rise 152.7% to $33.51 from $13.26 last year. It’s paying a standard and variable dividend. Is it too late to get into energy and Pioneer Natural Resources?

What Else do you Need to Know About What to do During This Sell-Off?

Tune into this week’s podcast to find out.

[In full disclosure, Tracey owns shares of PXD in the Zacks Value Investor portfolio and her personal portfolio.]

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Target Corporation (TGT) : Free Stock Analysis Report
Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Shopify Inc. (SHOP) : Free Stock Analysis Report
Block, Inc. (SQ) : Free Stock Analysis Report
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