These cheap and loved Nasdaq stocks could be buys following the correction

Published Thu, Jan 20 20229:20 AM EST

U.S. stocks, particularly Nasdaq names, are off to a rocky start in 2022, but there are some possible rebound candidates that could help investors recover from the early losses. The sell-off on Wall Street has been broad but has hit especially hard in tech stocks. On Wednesday, the Nasdaq-100 Index closed 10.24% below its record high, while the larger Nasdaq Composite was 11.55% from its high water mark. That put both indexes in correction territory . However, that doesn't mean that there aren't stocks that can stand out positively in the months ahead. Many investment professionals have said to focus on stocks with strong earnings as interest rates rise. "I suspect that we will see, yet again, that the profitable, high-[free cash flow] generating names that are deeply rooted in secular transitions to enterprise software, the cloud, digital advertising, and search will once again put up impressive growth numbers...and once again deliver impressive margin expansion in their quarterly reports," said Greg Branch, founder at Veritas Financial. The Nasdaq 100 member stocks listed below are all trading at least 10% below their recent highs and are valued with a price-to-earnings multiple that is below their five-year average. Additionally, they are well liked on Wall Street, with buy ratings from the majority of analysts and at least 10% upside to their average price target, according to data from FactSet. The list includes the big, profitable tech companies that carry heavy weights in the market averages, such as Amazon and Google-parent Alphabet . Those are also the two stocks on the list with the highest approval ratings, with buy ratings from more than 80% of analysts. Another Big Tech name on the list is Netflix . The streaming video giant, which saw subscriptions surge during the pandemic, is set to report its latest earnings after the bell on Thursday. Shares of Netflix are more than 26% below their recent high and have slid 14.4% in January alone. For investors looking outside of tech, there are a few consumer names that could be rebound candidates. Monster Beverage and Lululemon both made the list, with Lululemon down nearly 32% from its highs. Some of the stocks on the list offer more upside that others, based on average analyst targets. PayPal and dental care company Align Technologies are tied for the highest upside on the list at 50.2%, according to FactSet. -CNBC's Maggie Fitzgerald contributed reporting.

The Nasdaq Composite sank by more than 5% in its worst day since June 2020, as investors fled stocks amid concerns that aggressive tightening by the Federal Reserve will impact economic growth.

Jeenah Moon | Reuters

U.S. stocks, particularly Nasdaq names, are off to a rocky start in 2022, but there are some possible rebound candidates that could help investors recover from the early losses.

More In Investing trends

These stocks are so cheap, they're good buys even if earnings take a hit, Trivariate Research says

Tanaya Macheel

The grand 'work from anywhere' experiment got a few things wrong. Here's how companies are fixing it.

Christina Cheddar Berk

Stocks keep hitting new lows. Here's how to protect your portfolio and generate some returns

Jesse Pound