2 large stocks that have just gone on sale – The Motley Fool

The stock market has experienced a significant decline, with the Dow Jones Industrial Average plunging more than 1,300 points over a two-day period.

However, market movements like this are not a reason to panic. Instead, think of stock market corrections in the same way as a sale in your favorite store: this is the perfect time to buy quality goods at lower prices. With that in mind, here are two actions that have been shot down recently and are at the top of my shopping list right now.

Source of the image: Getty Images.

A growing financial ecosystem

Fintech Company Squareof (NYSE: SQ) The stock took a big defeat yesterday – down nearly 30% from recent highs, and that's after a little rebound.

Fortunately, this decision is not due to anything that affects the long-term growth potential of the company. In fact, three major negative catalysts pushed Square's share price down:

1. Square announced that he was engaging in consumer loans with Square Acomptments. To be clear, this added long-term growth potential, but also adds an additional element of credit risk, which is probably why the market has reacted negatively.
2. Square CEO Jack Dorsey recently sold more than 103,000 shares. In simple terms, this is a complete non-event in a long-term perspective. It was a planned sale resulting from the exercise of Dorsey's stock options – that's all.
3. Square's chief financial officer, Sarah Friar, has decided to leave the company to pursue other opportunities. Now, Brother has been an absolute rock star in his role, and it is certainly worth having excellent managers. So, I'm really not surprised that this has caused a downward movement. I'm certainly curious about who will be the next CFO, but I have no reason to doubt Dorsey's ability to find the right person for the job.

In summary: Square has amazing long-term growth potential and presents different aspects of its business. Has this changed? Not at all.

A massive growth opportunity for the consumer bank

I've watched Goldman Sachs (NYSE: GS) for a while, and this last downward move could finally push me to pull the trigger and add it to my wallet. To date, Goldman is down more than 13% from its recent high.

For starters, although it is trading for one of the lowest market valuations in the entire financial sector, Goldman's recent results have been quite impressive. Investment banking activities continue to grow, wealth management assets have steadily increased and profitability has been strong.

However, if Goldman Sachs is a long-term investment that excites me the most, it is its largely untapped potential in the personal banking sector. If you do not know it, Goldman billed the consumer bank with its Marcus by Goldman Sachs platform, which has generated billions of personal loans and offers high-yield online savings accounts. Although the first results have been excellent, both sides of the business are still quite small by the standards of the "big bank".

It could just be the tip of the iceberg. We recently learned that Goldman is entering the credit card business as a co-branding partner of Apple. In a presentation a few months ago, Goldman's president and chief operating officer, David Solomon, mentioned several other areas of potential growth, such as mortgages, auto loans, consumer products, and more. insurance, chequing accounts and payment solutions.

Here's why I think Goldman will become a major force in the consumer bank. The bank has the resources of a major bank to expand its offering as aggressively or prudently as it wants, and it has one of the best-known brands in the financial world. And as it does not operate commercial bank branches, it enjoys a major cost advantage over banks of comparable size.

In summary, Goldman Sachs enjoys all the benefits of a large bank, but without the hindrance of a legacy branch network.

Short-term weakness of long-term winners

Are Square and Goldman Sachs respectively 30% and 13% lower than they were a few weeks ago? Of course not. These two companies have the same growth potential as before the recent market downturn and, in many ways, they seemed cheap even before diving. If these two actions are not yet on your radar, they should perhaps be there now.

Matthew Frankel, CFP holds shares of Square and has the following options: Short December 2018 $ 90 calls on Square. The Motley Fool owns shares and recommends Square. The Motley Fool offers the following options: short January 2019, calls to $ 80 on Square. Motley Fool has a disclosure policy.