5 Beaten-Down Stocks to Buy on the Dip

The market has delivered some nauseating volatility of late. The good news? That has teed up a few great stocks to buy at a discount.

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(Image credit: Getty Images)

The past month has been a rocky stretch for the broader market. But the recent volatility has created a few attractive opportunities for investors looking for stocks to buy on the dip.

September is known to be a historically tough month for stocks. This time around has been no different. Worries over a potential debt crisis in China due to struggling Evergrande (EGRNY (opens in new tab)), the country's second-largest property developer, only exacerbated ongoing concerns over the effect of the Delta variant on the global economy.

Investors also have been rattled by uncertainty surrounding the U.S. debt ceiling, which, if Congress fails to raise, could result in "a potential shutdown by month-end and a debt default by October," says Kevin Simpson, founder and portfolio manager of Capital Wealth Planning, a registered investment advisor.

But while these issues have resulted in some nauseating volatility for investors, it also has presented them with several higher-quality stocks to buy at more attractive levels.

Just take care: Investors still must be savvy about which stocks to buy and which ones to avoid. To find solid companies to buy on the dip, we turned to the Stock News POWR Ratings System to search for Buy- and Strong Buy-rated stocks that recently pulled below their 50-day moving averages, suggesting that the selling has become overdone.

Based on that criteria, here are the five best stocks to buy on the dip right now.

Data is as of Sept. 24. POWR Ratings work on an A-B-C-D-F system. Stocks are listed in order of lowest to highest overall rating, and then alphabetically.

David Cohne
Contributing Writer, Kiplinger.com

David Cohne has 20 years of experience as an investment analyst and writer. Prior to StockNews, David spent 11 years as a consultant providing outsourced investment research and content to financial services companies, hedge funds and online publications. David enjoys researching and writing about stocks and the markets. He takes a fundamental quantitative approach in evaluating stocks for readers.