Top Stocks That Recently Dropped and Are Worth a Look

If you're an emotional investor, it can be hard to make money in the stock market. The euphoria of stock prices going higher leads many investors to buy even more shares at market highs, while the despair of crumbling stock prices leads many to sell at market lows. In some cases, stocks trade down for good reasons and should be avoided. However, in many cases, stock drops are mere "garden variety" sell-offs that are short-lived before stocks turn around and make new record highs.

Read: 25 Pandemic-Proof Stocks

Although 2020 was a rocky year for the market, it went on to make new highs by year-end. However, as of March 5, 2021, many well-known stocks have sold off by 10%, 20% or even more from their recent highs. For long-term investors who believe in these companies, the current share prices are simply "on sale," marking a much better entry point than even a few short weeks ago. The stocks listed below have all had fairly sharp sell-offs to begin 2021, and they may represent good opportunities for patient investors. The risk profile of these stocks vary widely, so consult with your financial advisor before buying any of them to make sure they match your investment objectives and risk tolerance. Curious? Read on to find the stocks worth a second look.

Trupanion (TRUP)

• Stock price as of March 5: $85.88

Trupanion provides private insurance for dogs and cats throughout the United States, Canada and Puerto Rico. People have always been willing to spend on their pets, and insurance is rapidly gaining in popularity. The company’s revenue grew 31% in its December quarter, and its membership retention stands at a whopping 98.71%, higher than even Costco’s legendary numbers. The stock had a tremendous run from mid-2020 through the end of the year, but it’s given back over 30% since its 2021 high of $123.86 on Feb. 7. 

See: 26 Smartest Ways To Invest Your Money During the Pandemic

Tesla (TSLA)

• Stock price as of March 5: $597.95

Tesla is one of the world’s great “love it or hate it” stocks. Depending on which type of investor has the upper hand at any given time, Tesla’s stock price can skyrocket or plummet. It did plenty of the former in 2020 when Tesla returned over 700% to shareholders. However, the bears have the upper hand thus far in 2021, with the stock plummeting from $880.02 to $597.95 in a matter of weeks. If you’re a believer of the Tesla story, this sharp pullback could prove to be a great buying opportunity. Of course, you’ll be in a constant daily battle with the bears, some of whom see the stock ultimately trading down to $19 or even as low as zero. 

Find Out: 13 Cars That Are Bad News for Tesla

Costco (COST)

• Stock price as of March 5: $317.32

Costco is as close to a “blue chip” retailer as there is. While many of its retail brethren suffered massive losses or even bankruptcy in 2020, Costco chugged along, proving to be the retailer of choice for many Americans during the pandemic. As the economy starts to normalize, Costco will likely continue to be the dominant player in the space, as its members are fanatically loyal and renew their memberships -- which comprise the bulk of Costco’s earnings -- at a rate of 91%. With the stock now more than 16% off its high of $380.15 in January 2021, Costco could be at an attractive entry point.

More: 20 Ways to Pay Less at Costco

PayPal (PYPL)

• Stock price as of March 5: $239.05

Payment processor PayPal has been on a tear. As the largest digital money transfer service, it has benefited from the rise of mobile payments and the reduction in cash transactions. The company has consistently grown earnings and sales since at least 2010, riding the wave of the secular trends toward electronic payments and transfers. However, profit-taking hit the stock in early 2021, and PayPal now sits more than 20% below the high it set just three weeks ago, on Feb. 15, 2021. In addition to the general tech sell-off, a large hedge fund dumped more than one-third of its PayPal shares, contributing to negative market sentiment.

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Nvidia (NVDA)

• Stock price as of March 5: $498.46

Digital media processing company Nvidia provides chips that power everything from self-driving cars to cloud gaming. The company is a tech stock favorite among investors, soaring 121% in 2020 alone and returning an astonishing 25% per year on average for each of the past 15 years. Caught in the tech stock sell-off that hit the Nasdaq and other indices in February and March 2021, Nvidia now sits nearly 20% below its Feb. 15 high of $613.21.

See: 25 Companies Making the Most Money From Coronavirus

Apple (AAPL)

• Stock price as of March 5: $121.42

“As goes Apple, so goes the market.” That’s an expression you’ve likely heard if you read or watch the financial press. At one point, the expression was used simply because Apple is a popular stock, and as more people piled into Apple, more people were generally buying up the stock market as well. But now, this expression has a much more literal meaning. Apple’s market capitalization has gotten so large that the company now comprises a whopping 6% of the S&P 500 index all by itself. Thus, if Apple is trading down, it’s more than likely that the whole market is going down as well. That has indeed been the case in recent weeks, as both Apple and the S&P 500 have been trading down. Apple itself has fallen about 15% from its 2021 highs. 

Read On: Biggest Product Flops From 20 Major Companies

Teladoc Health (TDOC)

• Stock price as of March 5: $189.69

Teladoc Health is a Wall Street darling that had an exceptional 2020 but has been battered thus far in 2021. Understandably, the company had a phenomenal 2020 in terms of revenue and earnings, as pandemic lockdowns made health teleconferences not only popular but also essential. However, Teladoc looks like it will not only survive but thrive in 2021 and beyond, even after the pandemic ends and in-person health consultations return in full force. The company has been priced for perfection, so perhaps the 35% fall from $292.51 on Feb. 18, 2021, is the perfect opportunity investors needed.

Find Out: 30 Amazing Jobs That Didn’t Exist a Decade Ago

EverQuote (EVER)

• Stock price as of March 5: $40.94

EverQuote stock has fallen over 20% in just eight trading days, marking an entry point for long-term investors who believe in the company’s business model. EverQuote is primarily an online insurance marketplace, allowing buyers to compare prices online. Online shopping in general continues to gain traction, and online financial marketplaces like EverQuote are no different. In addition to auto insurance comparisons, EverQuote has expanded to homeowners, life, health and renters insurance. The company earns money from the insurance companies that advertise on its site. With such digital ad spending expected to nearly double by 2024, EverQuote could be well-positioned here. 

More: 10 Stocks Set To Soar in 2021

Enphase Energy (ENPH)

• Stock price as of March 5: $143.55

Enphase Energy is a company that many analysts believe will benefit under the new Biden administration, as the president has made it clear that he will focus on clean energy and jobs. Enphase Energy makes microinverters for solar energy, and it bills itself as a global energy innovator. The company is more efficient and more profitable than its peers, making it the preeminent solar stock to buy. Clean energy stocks are notoriously volatile, but Enphase Energy has lost about one-third of its value just since early January 2021, making it a great buy for those believing in the company’s future. 

Read: Top Environmentally-Friendly Companies To Invest In

First Solar (FSLR)

• Stock price as of March 5: $73.70

First Solar plays a role in every step of the solar energy life cycle, from raw material sourcing and photovoltaic cell production to end-of-life collection and recycling. As with all solar stocks, FSLR can be extremely volatile. After trading up about 72% in 2020, First Solar has given some of those gains back to start 2021, dropping about 32% since Jan. 20. First Solar is working to improve its margin by exiting certain low-margin aspects of its business, but it does face a lot of competition in the space and will have to execute to regain its highs. If you're a believer that "a rising tide lifts all boats," however, the Biden administration's focus on clean energy should help remove some obstacles to growth in the solar industry as a whole.

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About the Author

John Csiszar

After earning a B.A. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm. During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients.

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