"Buy When It Drops" - Retail Investors Flock to Semiconductors, Batteries, and Cars

Retail investors are engaging in 'bargain buying' focusing on neglected stocks. This month, 9 out of the top 10 net purchased stocks have seen their prices fall.

According to the Korea Exchange on the 27th, the stock most net purchased by individual investors this month is Samsung Electronics. While foreigners net sold 1.382 trillion won worth, individuals bought 1.2359 trillion won worth, absorbing most of the supply.

Following are LG Energy Solution (358 billion won), Hyundai Motor (298.7 billion won), SK Telecom (234 billion won), LG Chem (213.2 billion won), NAVER (198.8 billion won), Samsung SDI (177.2 billion won), Celltrion (158.4 billion won), Hanwha Ocean (124.7 billion won), and Samsung Electronics Preferred (118 billion won). Among the stocks currently considered leading in the market, Hanwha Ocean was the only one. The rest were largely export stocks in semiconductors, batteries/chemicals, and automobiles, which are being overlooked in the market.

This is analyzed as individuals engaging in 'bottom fishing' focusing on relatively undervalued sectors amid a differentiated market by stock and sector. In fact, Samsung Electronics, a past leading stock, has fallen by 2.88% this month alone, struggling to rebound. Despite expectations for a recovery in the semiconductor industry, the stock price is already priced in, and geopolitical conflicts and other variables have dampened investor sentiment. Since the 13th, Samsung Electronics' stock price has risen on only three days: the 14th, 20th, and 26th. Including this, 9 out of the top 10 stocks by individual net purchase have fallen this month: LG Energy Solution (-16.02%), Hyundai Motor (-4.56%), SK Telecom (-4.60%), LG Chem (-15.32%), Samsung SDI (-8.98%), Celltrion (-3.53%), NAVER (-8.33%), Samsung Electronics Preferred (-5.12%). Hanwha Ocean, the only stock that rose, had a return of just 0.38%.

Opinions on the bargain buying strategy of retail investors are divided in the securities industry. The general outlook is that the relative weakness of export stocks will continue in the second half of the year due to the impact of tariffs imposed by the Trump administration. However, some suggest that after realizing profits in major sectors, the flow of funds may rotate to semiconductors and others. Especially as foreigners recently turned to net buying, expectations for a rise in the domestic stock market have increased.

Kim Soo-yeon, a researcher at Hanwha Investment & Securities, said, "Deciding when to increase the weight of Samsung Electronics, batteries, and automobiles will be the most important decision for the rest of the year," adding, "With the exchange rate, earnings, and events still not favorable, it may be okay to reduce the weight of these sectors for another month." On the other hand, Han Ji-young, a researcher at Kiwoom Securities, said, "Given the uncertainty of tariffs, it seems unlikely that foreigners and institutions will focus on semiconductors in the short term," but added, "It is important to note the growing desire for short-term profit-taking in major sectors currently yielding high returns."

seung@fnnews.com Lee Seung-yeon Reporter