A bear market can create panic in the markets. And that's certainly happening on the Nasdaq, where the index has fallen 28% year to date. That's even worse than the S&P 500's decline of 18%. Investors may be worried that the bearishness could persist and that stock prices may continue to fall even further in the weeks and months ahead.
But if you're a long-term investor, now may be an optimal time to load up on some hot deals. A couple of stocks that look cheap at their current valuations include Intuitive Surgical (ISRG -0.41%) and Meta Platforms (META 1.54%).
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1. Intuitive Surgical
Despite its long-term potential in the robotic-assisted surgery market, Intuitive Surgical's stock has been struggling this year. Its price-to-earnings (P/E) ratio of more than 60 likely attracted considerable bearishness in recent months. Even now, at a multiple of close to 50, it still isn't cheap compared to the Nasdaq 100 average P/E of 26.
The company's management also didn't help things on last month's earnings call when it only slightly upgraded its forecast for procedure growth this year by a single percentage point -- and that led to the stock crumbling even further in value.
The number of da Vinci procedures is a key metric the company uses to demonstrate the growing adoption of its devices. For the first quarter of 2022 (ended March 31), the number of da Vinci procedures rose by 19%. That percentage was likely inflated a bit due to the impact COVID-19 had on disrupting hospital procedures in the prior-year period. However, Intuitive Surgical notes that the resurgence of COVID in Q1 of 2022 still impacted its operations this past quarter, suggesting that the growth could have been even higher. Meanwhile, revenue grew 15% to just under $1.5 billion.
However, the stock itself is down around 38% in 2022 and is now trading around its 52-week lows. The healthcare stock could be a steal of a deal given Intuitive's potential for growth in the global surgical robot market.
2. Meta Platforms
Meta Platforms is another solid Nasdaq stock that looks great right now. It has also fallen by close to 40%, and this year it reached lows that it hasn't been at since the early stages of the pandemic. The massive decline in value is one of the reasons I decided to buy the stock as the price was simply too cheap to pass up.
At a P/E ratio of less than 16, Meta is trading at a valuation far lower than in previous years when it wouldn't be uncommon for the stock to trade at more than 20 times its earnings. That's an incredibly attractive valuation given the billions of users that use Facebook and how many people it has the potential to reach every day:
At 2.94 billion users for the first three months of 2022, the company rebounded from the previous period, when its monthly active user numbers declined.
More importantly, however, the social media company has reported an impressive profit margin of more than 31% over the trailing 12 months. Its revenue totaled $27.9 billion in Q1, which amounted to a year-over-year increase of 6.7%. And while the company could struggle to grow in the near term due to privacy changes in Apple's iOS software that make it harder for advertisers to reach consumers, the stock's current valuation makes it a risk worth taking.
I'm also confident that the business won't run out of ways to expand anytime soon. With nearly $40 billion in free cash flow over the trailing 12 months, Meta has plenty of resources to invest in its business or to take on a new acquisition that can strengthen its growth prospects.
