It’s been an incredible year thus far for tech & growth stocks, and this impressive performance since the March lows has helped to push the Nasdaq-100 (QQQ) to one of its best years on record, with a 44% return year-to-date.
Unfortunately, this massive rally has left a good chunk of the index’s constituents quite expensive as investors continue to hunt down anything with value left in the index to bolster their Q4 returns. The other issue is that investor sentiment is now sitting at its most dangerous levels since January 2018, with complacency hitting a new 2-year high this week.
Obviously, this doesn’t mean that the market has to fall apart in the next few weeks, but it does suggest that a Santa Rally might end up running into selling pressure. The good news is that there are still a couple of names in the index that rank well for growth and are trading at reasonable valuations. Let’s take a closer look at them below:
The companies we’ll discuss today are Facebook (FB) and DocuSign (DOCU): two companies that have little in common fundamentally, other than the fact that they’re both QQQ constituents. The former company is a social media giant and the proud owner of arguably the most addictive App in the world: Instagram.
The latter is a disruptive tech company that’s gained considerable traction since the global pandemic hit as fewer companies are meeting face to face. This is because DocuSign’s E-Signature offering allows businesses to go on as usual without physical signatures. Other than Zoom Video (ZM), this is one of the most essential products to businesses, so it’s no surprise that the stock has more than doubled this year.
While the two companies don’t share much fundamentally, they do have one common trait: strong earnings trends. While Facebook’s growth pales compared to DocuSign, the company is on track to…
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