October is well-known as a month of stocks declines. We all remember that the Dow Jones Industrial Average decreased by approximately 23% during the one day on October 19, 1987. As well as 1929 October when the Great Depression began.
However, stocks often perform well during the month. For instance, the S&P 500 index increased in October in seven out of the last ten years. It’s interesting how stocks perform in October of 2020.
Here are three stocks to buy this month that fit the bill.
Facebook and fastly will be winners of the decade
Facebook is an outstanding stock to buy, as Facebook is relatively cheap right now. The stock is approximately 14% below its August high. It’s close to 10% below the average analysts’ price target. Moreover, Facebook’s shares trade at almost 25 times expected earnings. But its price-to-earnings-to-growth (PEG) ratio, which factors in growth expectations over the following five years, stands at a low 0.95. Any PEG ratio below 1.0 means an attractive valuation.
In quarter 2, Facebook delivered an 11% year-over-year revenue increase, with its earnings almost doubling. The global pandemic affected practically all companies; however, Facebook could stay strong. As advertising spending bounces back, Facebook’s increase should accelerate.
The significant news is that Facebook is gearing up for a big AR push following year. According to analysts, it will be a big winner in AR above the rest of the decade.
Fastly’s revenue rose 62% year over year in the second quarter. Significantly, the company’s revenue growth is stimulating. This increase stems from the increased adoption of Fastly’s content delivery networks (CDNs) and edge platform products. The Coronavirus pandemic has increased internet usage, which has fueled higher demand for Fastly’s products.
Fastly currently has less than 1% of this potential market. Even though the stock has more than quadrupled over the last year, its market cap is less than $11 billion. Analysts say Fastly should be a winner over the following decade.