November historically marks the beginning of the best three months for stocks throughout the year, according to the Dow Jones Market Data Group. Those returns vary from year to year, but it might be a good time to scoop up a few tech stocks -- which often outperform other sectors during bull market rallies -- to capitalize on that warmer market sentiment.
Today, we'll take a closer look at three tech stocks that might be worth buying in November: an undervalued e-commerce stock, an overlooked special purpose acquisition company (SPAC), and an unloved tech giant.
1. An undervalued e-commerce play: Coupang
Coupang (CPNG 0.35%), the largest e-commerce company in South Korea, went public at $35 per share back in March. But today, it trades below its IPO price and is valued at less than three times this year's sales.
Image source: Getty Images.
That seems like an absurdly low price-to-sales ratio for a company that grew its revenue by 93% in 2020. Analysts also expect Coupang's revenue to increase another 58% this year and 40% in fiscal 2022.
Coupang's valuations have been depressed by bearish concerns about its saturation of the South Korean market, its ability to expand overseas, its lack of profits, and protests regarding its working conditions, which coincided with a warehouse fire earlier this year. SoftBank (SFTB.Y 0.93%), one of Coupang's top investors, even sold nearly $1.7 billion in shares of the company at a 15% discount to its IPO price in September.
Coupang still has a lot to prove, but its upcoming earnings report on Nov. 11 might clear the air and bring the bulls back -- especially if it narrows its losses, provides clearer updates regarding its overseas expansion plans, and addresses the ongoing concerns about its working conditions.
2. The overlooked SPAC: Gogoro
When the SPAC Poema Global Holdings (PPGH) announced its plans to merge with the Taiwanese electric scooter maker and battery network operator Gogoro in September, its stock barely budged.
But unlike many other SPAC-backed electric vehicle (EV) makers, Gogoro already generates revenue from a stable business. It launched its first electric scooter six years ago, and it operates a subscription-based network of more than 2,000 swappable battery stations across Taiwan.
By allowing fresh batteries to be immediately swapped at a kiosk, Gogoro's network eliminates lengthy charging sessions. Its batteries are also compatible with other brands of electric scooters.
Gogoro's revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell 17% and 9%, respectively, in 2020, as the pandemic disrupted travel trends and sales of new scooters. But as Gogoro expands into new markets like China and India, it expects its annual revenue to increase at a compound annual growth rate (CAGR) of 74% between 2021 and 2024, its number of subscribers to soar from 449,000 this year to 2.95 million, and its adjusted EBITDA to improve at a CAGR of 185%.
Those growth projections are very optimistic, but Gogoro's initial enterprise value of $2.35 billion would only value it at 2.5 times its revenue target for 2023. Investors who are interested in Gogoro's growth potential should check out the SPAC this month before the merger closes in early 2022.
3. The unloved tech giant: Apple
Apple's (AAPL 1.27%) stock recently dipped after its fourth-quarter revenue growth missed analysts' estimates. It mainly blamed supply chain constraints, which reduced its quarterly revenue by $6 billion by throttling its sales of iPhones, iPads, and Macs. It expects those constraints to bear an even bigger impact on its sales in the first quarter of 2022.
That warning seemingly masked all of the positive developments from Apple's report. All of its business segments still generated year-over-year sales growth during the quarter, with its iPhone sales growing 47% and its services revenue rising 26%. It ended the quarter with 745 million paid subscribers across all of its services, and its Greater China revenue surged 83%.
Apple's gross and operating margins also expanded year-over-year in the fourth quarter and the full year -- which indicates it still has plenty of pricing power among consumers and the ability to negotiate favorable rates with its suppliers and manufacturers. It also repurchased $86 billion in shares throughout 2021, which reduced its number of outstanding shares by nearly 4%, and ended the year with $191 billion in cash and marketable securities.
Simply put, Apple's core business is still incredibly strong, its stock looks reasonably valued at 27 times forward earnings, and its post-earnings dip could represent a promising buying opportunity for long-term investors.
