3 Bargain Stocks That Are Screaming Buys in February

2022 has been nothing short of volatile. Almost all stocks got crushed in January, and now February is a mixed bag of returns. Some high-growth stocks that have previously been hammered are starting to recover, but many are continuing their downtrend. This volatility is magnified during earnings season — where companies can rise or fall 20% on an earnings report. 

Long-term investors in this volatile period have the edge, however. They are not bound to the next month or even year, and they can focus on using this volatility to buy stocks at cheap prices that have not been seen in a long time. For investors looking to capitalize on market volatility and buy high-quality businesses at a cheap price, you might want to consider adding Pinterest (NYSE:PINS), PubMatic (NASDAQ:PUBM), and MercadoLibre (NASDAQ:MELI) to your portfolio. Here’s why.


Shares of Pinterest are still down 70% off their all-time high and trade at just 28 times forward earnings — even cheaper than other social media stocks like Match Group (NASDAQ:MTCH) — but the business is executing well. It reported fourth-quarter earnings, and the company’s growth in its average revenue per user (ARPU) took the spotlight. The company saw 23% year-over-year growth across the world, driven by 62% growth in its international markets. 

Pinterest has over 426 million users on its platform, and considering that social media giants like Meta Platforms (NASDAQ:FB) have topped out at 2.9 billion users, the real opportunity comes from its ARPU growth. Yes, if Pinterest reached 2.9 billion users, that would represent a growth of 580% from here, but if the company can successfully expand its ARPU, this growth could be so much more. The company’s international ARPU was just $0.57 in Q4, compared to Meta’s $27.91. So the room to grow, even if the company won’t reach Meta’s levels of monetization, is immense.

While the company’s user count should be monitored, it should not be the greatest concern. Pinterest has only been losing a small fraction of its users over the past year, and this quarter it lost just 6% year over year. Not ideal, but as long as its user count doesn’t get cut in half over the next two years, the ability to capitalize on monetization success will still be prevalent. With shares now reaching “value stock” prices, picking up shares should at least be on long-term investors’ radar.


When investors think of advertising technology, The Trade Desk (NASDAQ:TTD) likely springs to mind. However, investors should not count out the other side of adtech — the supply side. After all, ad space suppliers also need help finding the best value for their ad space, and PubMatic helps them do that. Pubmatic is one of the fastest-growing sell-side platforms in terms of organic growth, but if you look at the share price — which is down 62% from its all-time high — you might not have assumed that. 

PubMatic grew its revenue by 54% year over year to $58 million in third-quarter 2021, which marked the fourth consecutive quarter of 50% or more revenue growth. This is expected to continue when it reports full-year results on Feb. 28 — and likely for the next several years as well. The digital advertising space is expected to be worth $526 billion by 2024, meaning PubMatic has a runway to expand multiples from here.

PubMatic is only worth $1.4 billion, yet it is profitable and has net income margins of 19%. This financial maturity for such a small business could mean positive things about its financial picture in a decade. It trades for 31 times earnings — a cheap multiple compared to its major competitor Magnite (NASDAQ:MGNI) — making this stock a huge bargain right now.


MercadoLibre has become a dominant player in Latin American e-commerce, payments, and logistics, but with an all-time low valuation of eight times sales, you might have assumed something fundamentally changed with the business. MercadoLibre has only traded at eight times sales two other times in the past decade, so this valuation is quite literally a rock-bottom price.

However, the business is stronger than ever. Third-quarter revenue popped 73% year over year, hitting almost $2 billion — $125 million of which fell to the bottom line in net income. The company has 79 million users, and while that would be a lot in the U.S., it is just a fraction of the Latin American population. There are over 635 million citizens in Latin America, meaning that MercadoLibre has plenty of room to continue adding users. As the leading platform in the space, it might be a mistake to not take advantage of this discounted company today.

Originally published on Fool.com

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jamie Louko owns MercadoLibre, Pinterest, PubMatic, Inc., and The Trade Desk. The Motley Fool owns and recommends Magnite, Inc, Match Group, MercadoLibre, Meta Platforms, Inc., Pinterest, PubMatic, Inc., and The Trade Desk. The Motley Fool has a disclosure policy.

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