2 Stocks Down 45% and 37% to Buy Right Now | The Motley Fool

Buying stocks on the dip can be an effective strategy for long-term investors because it allows you to acquire shares in quality companies at a discounted price, which can also lower your average cost per share and amplify your total returns when the market eventually recovers. Although markets fluctuate in the short term, they tend to rise over the long run. Purchasing fundamentally sound assets on sale during temporary downturns caused by general market sentiment or overreactions to news, rather than a permanent change in their intrinsic value, can also be a valuable strategy as you build out a profitable portfolio. On that note, here are two stocks trading down significantly that could be compelling businesses to buy and hold for the long run. Image source: Getty Images. 1. Lululemon Athletica Lululemon Athletica 's ( LULU 0.67%) stock price is down about 45% from one year ago. Slowing sales growth in North America, increased competition, the impact of tariffs on margins, and a recent CEO transition have all been developments that seem to be putting pressure on the stock. In mid-December, it was announced that Calvin McDonald was leaving his role as CEO, effective Jan. 31, 2026, after nearly seven years in the role. Chief financial officer Meghan Frank and chief commercial officer André Maestrini will serve as interim co-CEOs during the search for a replacement. Meanwhile, investment management firm and activist fund Elliott Management recently took a significant stake in Lululemon and is reportedly playing a role in the decision as to who will take the helm next. Investors will have to wait to see who that is. It's worth noting, though, that not all the issues affecting this business are specific to Lululemon. In a weakening economy where consumers are hesitant to spend on certain nondiscretionary items, it's not surprising that premium athleisure wear has also been hurt. Case in point: Net revenue in the Americas (the company's core market) decreased by 2% in the third quarter, with comparable-store sales dropping 5%. That said, the international segment is a major bright spot, and its net revenue soared 33% in the third quarter. Lululemon also realized a 46% revenue gain in China and a 19% increase in its Rest of the World segment. NASDAQ: LULU Key Data Points This growth is helping to offset North American weakness and underscores the company's global reach in new, underpenetrated international markets. It remains a top women's active apparel brand in the U.S. and is addressing its product issues by accelerating development times and planning an infusion of new styles that could replace 35% of the spring 2026 product lineup. Lululemon has cultivated an incredibly loyal customer base through community engagement, hosting in-store events, and using local fitness ambassadors rather than celebrities. This strategy tends to turn customers into brand advocates and reduce marketing costs. The company is known for its high-quality, technically advanced fabrics and functional designs that justify premium pricing and help it maintain high gross margins. By controlling its distribution...

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