12 Best Depressed Stocks to Buy Now
Faiq Zafar
Sat, November 12, 2022, 2:31 PM
#8 . ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holdings: 47 YTD Decline (As of November 9): 30.68%
Based in Veldhoven, ASML Holding (NASDAQ:ASML) is a Dutch multinational corporation which specializes in the the development and manufacturing of photolithography machines, which are essential in the production of computer chips. As of 2022, ASML Holding (NASDAQ:ASML) is the largest semiconductor supplier in the industry.
On November 8, Morgan Stanley analyst Lee Simpson initiated coverage of ASML Holding (NASDAQ:ASML) with an Overweight rating and a $665.8 price target. According to the analyst, ASML Holding (NASDAQ:ASML) is a defensive play within the cyclical semiconductor industry and the high-quality brand name dominated the lithography system supply market, which will shield the company from macroeconomic pressures and high interest rates. The company's Q3 2022 returns were extremely favorable, completely outperforming expectations and showing strong indicators for growth. As of Q3 2022, the company's backlog also increased due to record sales, which points to strong demand for the company's product. And although the stock is currently depressed, strong fundamentals, positive analyst sentiment around the stock, and an annual dividend yield of 1.16% make it an ideal pick for long-term investors.
Here is what Baron Funds had to say about ASML Holding's (NASDAQ:ASML) solid fundamentals in their Q2 2022 investor letter:
“ASML Holding N.V. designs and manufactures semiconductor production equipment. It specializes in photolithography equipment, where light sources are used to photo-reactively create patterns on wafers that become printed circuits. ASML is the dominant leader across all types of lithography but, most importantly, is the only company selling equipment for extreme ultra-violet (EUV) lithography, the latest generation technology.
Indeed, because of the stalling out of Moore’s Law, advanced lithography of larger and multi-patterned silicon chips has been critical for leading-edge chip manufacturing and continued improvement in semiconductor chip performance over time. The company is well positioned to continue growing above industry rates as it rapidly adds capacity across its entire business to meet rising industry demand, especially from leading-edge customers continuing to invest to stay ahead of their competitors and drive chip performance forward.
Additionally, the introduction of high-NA EUV technology in the middle of the decade will add another leg to the growth opportunity.”