Buy the Dip Over Chasing Highs? Which Crashed Stocks Are Worth a Bet?

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08-15
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Right now, Buffett’s “cigar butt” strategy—buying severely oversold large-cap stocks—may be more suitable. Yesterday, $UnitedHealth(UNH)$ jumps 10%.

Yesterday, $UnitedHealth(UNH)$ staged a stunning turnaround as Warren Buffett scooped up $1.6 billion worth of shares.

Berkshire Hathaway built a new $1.6 billion position in U.S. health insurance giant UnitedHealth in Q2, acquiring 5.039 million shares at an average cost of $314 each.

It’s not just Buffett—top global quant fund Renaissance Technologies, David Tepper’s Appaloosa Management, and legendary investor Michael Burry have also piled in. While short-term regulatory and cost risks can’t be ignored, the company’s valuation has fallen to historic lows.

Is it smarter to buy the dip now rather than chase highs?

Before $NVIDIA(NVDA)$ earnings, the stock may remain volatile at high levels. But one risk to note: in the AI space, the two biggest bubbles— $Palantir Technologies Inc.(PLTR)$ and NVDA—are at risk.

What other heavily sold-off stocks are worth scooping up?

Lululemon has already been cut in half this year, plunging below $200; Novo Nordisk is down 40% YTD; and Eli Lilly dropped 15% just before its recent earnings.

Some influencers suggest that, given Trump’s targeting of UNH and Intel, UPS could be the next company the Trump family “lays in wait” for. This is because the earlier “Big and Beautiful” Act removed the duty-free threshold for small parcels. In a previous earnings call, UPS’s CFO said, “This quarter, changes in U.S. trade policy led to a 34.8% drop in our China-U.S. route volume in May and June—worse than we expected.”

Questions for discussion

  1. After jumping 10%, Buffett’s cost basis is still higher than the current market price.

  2. Would you still buy UNH now?

  3. Which heavily sold-off stocks would you buy on the dip?

  4. Do you know other stocks that are oversold?

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5x Winners vs. 50% Losers: Buy High, Ride Higher? Or Buy Low, Go Big?
Two-thirds of this year have already passed, and many companies have seen 10x gains. We’ve heard that many investors around us have made good profits this year. Which of these high-performing stocks have you managed to catch? On the other hand, there are also some stocks that can’t be ignored—they’ve been cut in half even as the broader market keeps hitting record highs. These companies have fallen nearly 50% YTD. Is it a good time to buy the dip now?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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Comments

  • Shyon
    08-15
    Shyon
    I still find UNH attractive even after its 10% jump. Buffett’s $314 average cost means the stock is still below his entry, and valuation remains near historic lows. While regulatory and cost risks exist, they seem priced in, making it appealing for long-term investors like me.

    Outside UNH, I’m eyeing Lululemon under $200 after being cut in half this year, and Novo Nordisk’s 40% drop despite its GLP-1 market strength. Eli Lilly’s 15% pre-earnings dip could also be a buying chance for those confident in its pipeline. When sentiment turns, the recovery could be sharp.

    UPS is also on my watchlist. Trade policy changes hit China-U.S. volumes hard, but it’s still a global logistics leader. If political pressure pushes shares lower, it could be a classic Buffett-style bargain—better than chasing inflated AI names. In a market full of hype, I’d rather quietly collect undervalued blue chips and let time do the compounding.

    @Tiger_comments @TigerStars

  • MHh
    08-17
    MHh
    So happy that I bought UNH and my cost price is lower than the current price and of course, below buffett’s. Happy that many heavyweights bought UNH and lifted the price. I bought UNH purely based on valuation as it is heavily discounted and there is not alot of room to go down. I wouldn’t buy UNH now as this is above my cost price although many would also argue that the upside back to its previous $600 is still a big one. I prefer to manage my risk and my greed[LOL]. I was very tempted to buy Novo Nordisk and Eli but decided to stick to my principles of never buying pharmaceutical companies. This is because one can never predict when another company will have a blockbuster and kills off the revenue of the company that one has already bought. This is now happening between Lilly and Novo Nordisk with the anti obesity drugs. Another company may announce their new drug and reduce the revenue for these 2 companies. I think BYD is oversold given their market capture. Will look to buying it.
  • 1PC
    08-16
    1PC
    I won't Buy UNH but might consider ELI [Chuckle], it's still a Strong Medical player , waiting for a suit time & funds to deploy [Pitiful] @Jes86188 @koolgal @Shernice軒嬣 2000 @JC888 @Barcode @Shyon
    • Shyon: 
      A good choice as well
  • DiAngel
    08-15
    DiAngel
    I won’t buy $UnitedHealth(UNH)$ as I don’t have such deep pocket as Buffett. [Chuckle][Smile].


    I will just be contented with whatever I have and play it safe. [LOL][Happy][Smile][Tongue][Cool][Grin][Chuckle][Bless][Heart]


    @MHh @Universe宇宙 @Wayneqq @melson @rL
  • koolgal
    08-16
    koolgal
    🌟🌟🌟I like $Novo-Nordisk A/S(NVO)$ as the global obesity drug market is experiencing rapid growth and is projected to reach significant figures in the coming years.  Goldman Sachs estimates the market to be worth a massive USD 95 billion by 2030.

    Novo Nordisk's share price is down 40% year todate and a huge 60% in 2024.  It has built a formidable moat around its GLP-1 therapies - notably Ozempic and Wegovy.

    While Novo Nordisk is not quite in the "cigar butt" territory, I believe that it is undervalued and oversold.  Novo Nordisk also pays a good dividend at 3.30% yield and has solid fundamentals, great for dividend seeking investors like me.

    @Tiger_comments @TigerStars @Tiger_SG @CaptainTiger

  • chiaosiong
    08-16
    chiaosiong
    it depends on your strategy. if you plan to hold every long term like for few years, of course you can go in UNH now. however, if you're just aim for earning fast profit like short-term trading, then UNH is still a no at least technically. unless you have superb trading skills for day trading.
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