The communication services sector is currently experiencing a wave of oversold stocks, which presents a compelling opportunity for investors seeking undervalued companies. The Relative Strength Index (RSI) is a widely used momentum indicator that compares a stock’s strength during upward price movements to its strength during downward price movements. An asset is generally considered oversold when the RSI dips below 30, suggesting that the stock might be undervalued and poised for a potential rebound.
Here are three major oversold players in the communication services sector, all with RSI values near or below 30, that have caught the attention of market analysts:
comScore Inc (SCOR)
: On August 6, comScore released disappointing second-quarter financial results and revised its revenue guidance for FY24 downward. Although the company acknowledged the shortfalls, they expressed confidence in their strategy to deliver omnichannel measurement solutions. Despite this, comScore’s stock experienced a significant decline, falling about 45% over the past month. It currently has a 52-week low of $6.41. The RSI for SCOR stands at 28.03. Despite the recent dip, comScore’s stock closed at $7.17 on Friday, indicating a potential recovery.SPAR Group Inc (SGRP)
: On August 14, SPAR Group reported better-than-expected quarterly sales. The company highlighted its focus on simplifying operations and driving growth in the Americas, particularly in the United States and Canada. This focus resulted in a 37% increase in revenue in the ongoing U.S. business and a 14% increase in Canada. Additionally, the company continued divesting underperforming assets, leading to a one-time $4.9 million capital gain and an increase in cash reserves to $22 million. Despite this positive performance, SPAR Group’s stock has fallen around 20% over the past month, reaching a 52-week low of $0.70. Its RSI value is currently 25.61. However, shares closed at $1.45 on Friday, suggesting a potential turning point for the stock.IQIYI Inc – ADR (IQ)
: On August 27, Goldman Sachs analyst Lincoln Kong downgraded iQIYI from Buy to Neutral, setting a price target of $2.8. This downgrade led to a significant decline in the company’s shares, falling around 31% over the past month. The stock reached a 52-week low of $2.08 and currently has an RSI value of 26.24. Despite the recent downward trend, IQIYI’s shares closed at $2.15 on Friday, suggesting a possible rebound.It is essential to note that investing in stocks involves inherent risks, and past performance is not necessarily indicative of future results. Thorough research and due diligence are crucial before making any investment decisions. These oversold stocks in the communication services sector might offer intriguing opportunities, but investors should carefully consider their individual risk tolerance and investment goals before making any investment decisions.
