5 brand stocks to buy put your fists in if the market collapses
For 18 months, investors have benefited from a historic rebound in the S&P 500. Since reaching its bear market low in March 2020, the widely followed index has doubled.
However, crashes and fixes are an integral part of investing in the planet’s greatest wealth creator. On Monday, September 20, the S&P 500 posted its worst single session performance in four months. While it’s impossible to know if this is the start of a full-fledged correction or just an emotionally driven short-term sell-off, one thing is certain: a plummeting market is always a opportune time to invest your money from renowned and proven companies.
If the market were to continue to fall in the days or weeks ahead, long-term investors should consider buying the following five branded stocks.
History has shown that every dip in the payment processing giant MasterCard (NYSE: MA) is an opportunity for investors to buy this high margin company at a discount.
Mastercard is a cyclical business that benefits from spending a lot of time in the sun. Although recessions and contractions are part of the normal business cycle, periods of economic expansion often last for years. Mastercard is able to leverage consumer and business spending during these long periods of expansion. It’s a simple numbers game that has always favored Mastercard.
Another reason it’s such a successful business is that it avoids lending. While Mastercard forgoes the ability to generate interest income and fees as a lender, it also avoids the credit failures that come with inevitable recessions. Not having to put capital aside to cover these defaults is one of the main reasons its profit margin is consistently north of 40%.
Mastercard is the # 2 payment processor in the United States, the world’s largest consumer market, and it offers a long lead for global expansion. If the market were to collapse, it would be an obvious buy.
This might not be the first brand title that comes to mind when uncertainty hits Wall Street, but a do-it-yourself renovation chain Home deposit (NYSE: HD) is a really smart buy in any weak market.
While you might feel like Home Depot is a fully cyclical stock, the company has a way to hedge its bets, so to speak, in any economic environment. It is obviously advantageous during times of expansion with high demand from commercial customers, but what is often overlooked is that home renovations become popular during times of contraction. With fewer people moving during contractions or recessions, this creates the perfect scenario for homeowners to turn things around.
Home Depot’s aggressive investments in digitization are also expected to pay off. Walk-in customers in its physical stores are still the bread and butter of this business, but being able to integrate the physical and digital experience should lead to faster sales growth and a better customer experience across the board. together. There is no reason The Home Depot cannot maintain double-digit growth in direct-to-consumer sales for the foreseeable future.
Technological stock Broadcom (NASDAQ: AVGO) is another branded business that investors can cram into if the stock market goes down.
Although Broadcom’s semiconductor solutions are used by a number of industries, smartphones have long been the company’s main revenue generator. Particularly important is the deployment of 5G wireless infrastructure.
It’s been about a decade since consumers and businesses were offered a substantial upgrade in download speeds. This should lead to a multi-year smartphone replacement cycle that will benefit Broadcom, which makes 5G chips and other accessories found in smartphones.
Beyond wireless devices, Broadcom seems to be sitting on a real gold mine with companies moving more and more of their data to the cloud. The company provides connectivity and data center access chips, which are essential for storing this data.
Want one more reason to take the plunge? Broadcom’s quarterly dividend has grown more than 5,000% in less than 11 years. With much of its production capacity booked months in advance and a 2.9% yield to boot, Broadcom can be the rock of your portfolio in the tech space.
Bristol Myers Squibb
Pharmaceutical stocks are a great place to park your money if and when stock market volatility increases. The stock of brand name drugs to buy by hand, if the market continues to decline, is Bristol Myers Squibb (NYSE: BMY).
What makes this company so special is its organic and acquisition-based growth. Starting with the former, Bristol Myers is set to rake north of Eliquis $ 10 billion this year. Eliquis is the world leader in oral anticoagulants and was developed in cooperation with Pfizer.
There is also the cancer immunotherapy Opdivo, which is approved in 10 indications and is being examined in dozens of clinical trials as monotherapy or in combination. Opdivo already achieves an annual turnover of approximately $ 7 billion.
On the acquisition side, Bristol Myers Squibb made waves by acquiring cancer and immunology drug developer Celgene in 2019. The gem of the takeover was multiple myeloma drug Revlimid, which topped $ 12 billion. dollars in sales last year. A combination of label expansion, longer shelf life, improved cancer screening diagnostics, and strong pricing power has helped Revlimid show double-digit annual growth for over a decade.
Being able to hook Bristol Myers Squibb to less than eight times its annual profits is a real boon.
Finally, opportunistic long-term investors can buy a cloud-based customer relationship management (CRM) software provider. Salesforce.com (NYSE: CRM) put the fist back if the market plummets.
For those of you who may not be familiar with CRM software, it is used by businesses to improve customer relationships and grow sales. It can be used to monitor product and service issues, manage online marketing campaigns, and run predictive sales analytics.
Salesforce slips into the picture as king of the mountain. It held just under 20% of the global CRM market share, based on revenue, in the first half of 2020, according to a report from IDC. The next four competitors didn’t even combine to match Salesforce’s market share. This places it at the center of a sustainable double-digit growth trend for consumer-oriented businesses.
And like Bristol Myers, he’s an acquisitions superstar. CEO Marc Benioff oversaw the profit-generating purchases of MuleSoft and Tableau, and recently finalized the takeover of cloud-based business communications platform Slack Technologies. Slack should help Salesforce cross-sell its solutions to small and medium businesses.
With Benioff calling for $ 50 billion in annual sales in five years, more than double the $ 21.3 billion reported for fiscal 2021, Salesforce ticks all the boxes as an obvious buy.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.