We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dip Buying Opportunity: 3 Leading Stocks to Buy Now
Read MoreHide Full Article
Yesterday, the S&P 500 experienced its first 2% selloff in nearly two years, after trading lower five of the previous six days. Is this the end of the bull market? I think probably not.
That doesn’t mean the market is going to rally immediately back to new all-time highs though either. There is a real possibility that stocks chop around for a few months leading up to the presidential election, but that doesn’t mean you should wait until then to start buying.
In this situation, I think there are three good options out there; buy shares in what has been working like mega cap tech stocks, buy shares in more defensive names, or buy shares of uncorrelated stocks.
Here I am going to share my favorite pick from each of these options. Amazon ((AMZN - Free Report) ) represents the tech stock, International Paper ((IP - Free Report) ) the defensive and Newmont ((NEM - Free Report) ) the uncorrelated. Each of them enjoys top Zacks Ranks and two of them are outperforming the market year to date.
Image Source: Zacks Investment Research
Amazon: Tech Giant Trading at a Historical Discount
Amazon, a leading force in the technology sector and an unparalleled giant in the e-commerce and cloud computing spaces, presents a compelling investment opportunity. Despite the market's recent volatility, Amazon has demonstrated resilience and strength, making it an attractive option for investors seeking both growth and value. Additionally, Amazon currently boasts a Zacks Rank #2 (Buy) rating, reflecting upward trending earnings revisions.
Amazon's performance during the recent market sell-off has been notable. The company has maintained the best relative strength among the mega-cap technology stocks, reflecting its ability to withstand market pressures better than its peers in the current environment.
One of the standout aspects of Amazon's investment case is its robust earnings growth prospects. Analysts project Amazon's earnings per share (EPS) to grow at an annual rate of 29.6% over the next three to five years.
This forecasted growth rate is particularly impressive given Amazon's size and maturity. For a company of Amazon's scale, such rapid growth underscores its ability to continually innovate, expand its market presence, and drive profitability across its various business segments.
Amazon's current valuation presents a unique buying opportunity. The stock is trading at a one-year forward earnings multiple of 38.4x, which is significantly below its five-year median of 71.9x. To provide further context, this valuation is the lowest Amazon has experienced in the past decade, making it a historically attractive entry point for investors.
Image Source: Zacks Investment Research
Newmont: Riding the Trend Higher in Gold
Newmont stands out as an attractive investment opportunity, particularly for those looking to capitalize on the strong upward trend in gold prices and the often-uncorrelated returns they offer. The company's robust fundamentals and favorable market conditions make it a compelling addition to any portfolio.
Newmont currently has a Zacks Rank #2 (Buy) rating, indicating upward trending earnings revisions and improving the odds of near-term strength.
Newmont is also effectively riding the wave of increasing gold prices, which have recently reached new all-time highs. The company’s performance is closely linked to the price of gold, and as gold continues to outperform the S&P 500, Newmont benefits significantly. Investors seeking exposure to the precious metals market can find Newmont to be an attractive option, as it stands to gain from any further appreciation in gold prices.
Newmont's earnings per share (EPS) growth forecasts are particularly noteworthy. Analysts project EPS to grow at an impressive annual rate of 47.9% over the next three to five years.
Despite its strong growth prospects, Newmont is trading at an appealing valuation. The company has a forward earnings multiple of 18.1x, which is relatively low compared to its industry peers. Additionally, Newmont boasts a PEG ratio of just 0.38, indicating that the stock is undervalued relative to its expected growth.
From a technical analysis perspective, Newmont's chart setup is also quite promising. The stock is currently forming a bull flag pattern, a continuation pattern that typically precedes further upward movement. If Newmont can hold this pattern and break out above the $47.30 level, it would confirm a technical breakout, potentially leading to significant gains.
Image Source: TradingView
Internation Paper: Strong Performance During Market Correction
International Paper has proven its resilience and defensive nature during the recent market volatility, emerging as a standout performer. While the broad market has experienced a 3% decline over the past two weeks, International Paper has gained 7%.
International Paper holds a Zacks Rank #1 (Strong Buy) rating, reflecting its strong fundamentals and positive outlook from analysts. The company's earnings estimates have been consistently revised upward across various timeframes, with FY25 earnings estimates seeing a notable 13.6% increase over the past two months.
International Paper offers a substantial dividend yield of 4%, making it an attractive choice for income-focused investors. The company's commitment to returning cash to shareholders is further evidenced by its steady share buyback program over the last decade, which has reduced shares outstanding by 20% in that time.
During periods of market correction, defensive stocks like International Paper often shine. The company's strong performance amidst market volatility highlights its ability to provide stability and relative safety for investors.
Image Source: TradingView
Bottom Line
In this uncertain environment, I offer investors three options: investing in high-performing mega-cap tech stocks, shifting to more defensive names, or diversifying with uncorrelated stocks. Each of these strategies has its merits, and choosing the right mix depends on individual risk tolerance and investment goals.
While market volatility can be unsettling, it also presents opportunities for strategic investment. Amazon, Newmont, and International Paper each offer unique advantages, whether through growth potential, defensive stability, or uncorrelated returns. By carefully selecting stocks from these categories, investors can navigate the choppy waters leading up to the presidential election and position themselves for long-term success.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Dip Buying Opportunity: 3 Leading Stocks to Buy Now
Yesterday, the S&P 500 experienced its first 2% selloff in nearly two years, after trading lower five of the previous six days. Is this the end of the bull market? I think probably not.
That doesn’t mean the market is going to rally immediately back to new all-time highs though either. There is a real possibility that stocks chop around for a few months leading up to the presidential election, but that doesn’t mean you should wait until then to start buying.
In this situation, I think there are three good options out there; buy shares in what has been working like mega cap tech stocks, buy shares in more defensive names, or buy shares of uncorrelated stocks.
Here I am going to share my favorite pick from each of these options. Amazon ((AMZN - Free Report) ) represents the tech stock, International Paper ((IP - Free Report) ) the defensive and Newmont ((NEM - Free Report) ) the uncorrelated. Each of them enjoys top Zacks Ranks and two of them are outperforming the market year to date.
Image Source: Zacks Investment Research
Amazon: Tech Giant Trading at a Historical Discount
Amazon, a leading force in the technology sector and an unparalleled giant in the e-commerce and cloud computing spaces, presents a compelling investment opportunity. Despite the market's recent volatility, Amazon has demonstrated resilience and strength, making it an attractive option for investors seeking both growth and value. Additionally, Amazon currently boasts a Zacks Rank #2 (Buy) rating, reflecting upward trending earnings revisions.
Amazon's performance during the recent market sell-off has been notable. The company has maintained the best relative strength among the mega-cap technology stocks, reflecting its ability to withstand market pressures better than its peers in the current environment.
One of the standout aspects of Amazon's investment case is its robust earnings growth prospects. Analysts project Amazon's earnings per share (EPS) to grow at an annual rate of 29.6% over the next three to five years.
This forecasted growth rate is particularly impressive given Amazon's size and maturity. For a company of Amazon's scale, such rapid growth underscores its ability to continually innovate, expand its market presence, and drive profitability across its various business segments.
Amazon's current valuation presents a unique buying opportunity. The stock is trading at a one-year forward earnings multiple of 38.4x, which is significantly below its five-year median of 71.9x. To provide further context, this valuation is the lowest Amazon has experienced in the past decade, making it a historically attractive entry point for investors.
Image Source: Zacks Investment Research
Newmont: Riding the Trend Higher in Gold
Newmont stands out as an attractive investment opportunity, particularly for those looking to capitalize on the strong upward trend in gold prices and the often-uncorrelated returns they offer. The company's robust fundamentals and favorable market conditions make it a compelling addition to any portfolio.
Newmont currently has a Zacks Rank #2 (Buy) rating, indicating upward trending earnings revisions and improving the odds of near-term strength.
Newmont is also effectively riding the wave of increasing gold prices, which have recently reached new all-time highs. The company’s performance is closely linked to the price of gold, and as gold continues to outperform the S&P 500, Newmont benefits significantly. Investors seeking exposure to the precious metals market can find Newmont to be an attractive option, as it stands to gain from any further appreciation in gold prices.
Newmont's earnings per share (EPS) growth forecasts are particularly noteworthy. Analysts project EPS to grow at an impressive annual rate of 47.9% over the next three to five years.
Despite its strong growth prospects, Newmont is trading at an appealing valuation. The company has a forward earnings multiple of 18.1x, which is relatively low compared to its industry peers. Additionally, Newmont boasts a PEG ratio of just 0.38, indicating that the stock is undervalued relative to its expected growth.
From a technical analysis perspective, Newmont's chart setup is also quite promising. The stock is currently forming a bull flag pattern, a continuation pattern that typically precedes further upward movement. If Newmont can hold this pattern and break out above the $47.30 level, it would confirm a technical breakout, potentially leading to significant gains.
Image Source: TradingView
Internation Paper: Strong Performance During Market Correction
International Paper has proven its resilience and defensive nature during the recent market volatility, emerging as a standout performer. While the broad market has experienced a 3% decline over the past two weeks, International Paper has gained 7%.
International Paper holds a Zacks Rank #1 (Strong Buy) rating, reflecting its strong fundamentals and positive outlook from analysts. The company's earnings estimates have been consistently revised upward across various timeframes, with FY25 earnings estimates seeing a notable 13.6% increase over the past two months.
International Paper offers a substantial dividend yield of 4%, making it an attractive choice for income-focused investors. The company's commitment to returning cash to shareholders is further evidenced by its steady share buyback program over the last decade, which has reduced shares outstanding by 20% in that time.
During periods of market correction, defensive stocks like International Paper often shine. The company's strong performance amidst market volatility highlights its ability to provide stability and relative safety for investors.
Image Source: TradingView
Bottom Line
In this uncertain environment, I offer investors three options: investing in high-performing mega-cap tech stocks, shifting to more defensive names, or diversifying with uncorrelated stocks. Each of these strategies has its merits, and choosing the right mix depends on individual risk tolerance and investment goals.
While market volatility can be unsettling, it also presents opportunities for strategic investment. Amazon, Newmont, and International Paper each offer unique advantages, whether through growth potential, defensive stability, or uncorrelated returns. By carefully selecting stocks from these categories, investors can navigate the choppy waters leading up to the presidential election and position themselves for long-term success.