Throughout mankind’s history, and even to this day, Polaris, or the north star provides a crucial frame of reference. Polaris is situated directly atop the earth’s axis, staying put while other stars dance around it. Similarly, companies levered toward secular and stable businesses represent the best stocks to buy during market downturns.
While the vast majority of publicly traded securities have absorbed substantial pain last month, they all share a common negative catalyst: fear of the unknown. For most organizations, that fear is China and the real possibility of a protracted trade war. In other cases, it’s the upcoming midterm elections and the questions they will raise.
But the best stocks to buy at this present time have gone against the grain. Whether they’re holding onto their market value, or have experienced profitability, some organizations haven’t let distractions derail them.
Typically, this is because their industry demand isn’t vulnerable to geopolitical whims. A customer might skimp on a flat-screen TV, but they can’t say the same about their medication. Or, a company’s products are aligned with future business trends that extracurricular distractions simply don’t matter.
Admittedly, it’s difficult to concentrate on your portfolio during a bearish phase. But “north star” investments do exist, and they’re more plentiful than you might think. Here are seven of the best stocks to buy in these troubled waters:
Walgreens Boots Alliance (WBA)
One of the best stocks to buy amid a market crash is a company that’s levered toward an indispensable industry. A prime example is Walgreens Boots Alliance (NASDAQ:WBA). As a retail pharmaceutical company with both domestic and international exposure, WBA stock offers fundamental protection against cyclical volatility.
Sometimes, though, theory and reality don’t often align. Fortunately for WBA stock, this is a case where the fundamentals are well represented in the markets. Indeed, shares of Walgreens Boots Alliance have greatly exceeded benchmark indices. For October, WBA gained 9.5%, while during the second half of the year, shares are up nearly 35%.
While the company has already enjoyed outstanding performances, WBA stock still has more upside potential. Its most recent earnings report for the fourth quarter impressed the markets, producing strong earnings and sales growth. Plus, consumers are unlikely to skimp out on the company’s essential products, irrespective of economic conditions.
CME Group (CME)
At first glance, CME Group (NASDAQ:CME) doesn’t immediately strike you as one of the best stocks to buy right now. Anything to do with the broader markets and investment services seems like an opportunity to deleverage. However, a quick look at CME stock suggests otherwise.
CME Group has simply proven to be one of the best stocks during this market fallout. In October, while the Dow Jones Industrial Average crumbled, CME stock gained nearly 7%. Going back to the July open, shares have jumped almost 13%.
I’m sure most investors are still hesitant on buying into CME stock. We’ve heard time and again that millennials are not investing in the stock market. If that’s the case, why risk exposure to a company that operates futures and options exchanges?
For one thing, these “exotic” instruments represent a necessary component of the broader markets. Second, CME Group has demonstrated surprising flexibility for such a staid organization. This is perfectly demonstrated with the company’s foray into bitcoin.
I’ve heard that bitcoin has some popularity among millennials, which is why you should give CME stock a second look.
I’m not saying anything new when I say that Coca-Cola (NYSE:KO) has frustrated long-term shareholders. While no one expects KO stock to be a superior growth engine, investors do like to see returns. Unfortunately, Coca-Cola shares, at their current price, haven’t moved much for two-and-a-half years.
That might change in the current environment. For the month of October, KO stock almost hit 4%. No, that’s not going to transform the iconic beverage-maker into a high-powered tech company. But have you seen tech firms lately? By not dying, KO puts itself among the best stocks to buy.
Better yet, the positive sentiment surrounding the company isn’t based on whimsical emotions. Earlier this summer, Coca-Cola pulled off a surprising Q2 earnings beat. It followed that up with another comprehensive top-and-bottom beat in Q3. That promptly pushed KO stock higher.
I still see reasons for believing in Coca-Cola. First, the company specializes in selling cheap, and increasingly relevant consumer staples. Second, KO stock features a fairly generous 3.3% dividend yield, a huge bonus at this juncture.
American Tower (AMT)
Another name that some investors may find surprising is American Tower (NYSE:AMT). In recent weeks, shares of smartphone-component manufacturers have suffered tremendously volatility. But for AMT stock — where the underlying company specializes in cell phone towers — it has experienced the opposite effect.
During the October selloff when most publicly traded firms were suffering catastrophic losses, AMT ended the month up nearly 7%. That stat is more impressive when you consider that shares dropped more than 3% on Halloween. For the year-to-date, American Tower has gained 9%.
Although AMT stock lacks the pizzazz that typically belongs on a list of best stocks, its underlying industry is indispensable. As we move further into the world of 5G wireless networks, American Tower’s enviable real-estate portfolio levers significant value.
And while it’s true that AMT’s cell towers are suited for 4G, 5G cells must still communicate with larger towers. Further, American Tower has a strong international presence, and not all countries will adopt 5G simultaneously.
For whatever reason, several notable firms have suffered a backlash from racially motivated incidents. The most recent example is Papa John’s (NASDAQ:PZZA) notorious incident involving founder John Schnatter. Although not quite as controversial, Starbucks (NASDAQ:SBUX) generated negative headlines for racially discriminating against specific customers.
That aside, both Papa John’s and SBUX stock have something interesting in common: they have climbed back from their post-discrimination woes.
Since hitting bottom near June end, SBUX stock has skyrocketed nearly 22%. Last month, Starbucks was one of the few investments that didn’t roll over, gaining a little over 2%. Frankly, I find this shocking considering how divisive our political rhetoric has become.
Nevertheless, it’s clear that the American people are more forgiving than I thought. That puts SBUX stock in a good position during these uncertain times. The company delivered an overall strong earnings report, albeit with some weaknesses in foot traffic.
But the bottom line for me is that nothing — not even racial controversy — can take down the Starbucks brand. This is an awkward but still viable reason to consider SBUX stock.
With all that’s happened over the past few weeks, and with a heavily contested midterm elections coming up, I’ve completely forgotten about Disney (NYSE:DIS). Yet perhaps that’s for a good reason. Sometimes, flying under the radar is the key to success.
While I wouldn’t call DIS stock a superb October investment, it was one of the few Dow 30 companies to keep the bears at bay. Yes, Disney shares lost 2% last month, but I consider that a victory against the bigger picture. The underlying index dropped almost 6% during the same timeframe.
But with DIS stock, I’m not so much interested in analyzing stats than I am assessing its potential. Indeed, I think Disney is ideally positioned, and even more so if broader bearishness continues.
As I explained my thoughts on AMC Entertainment (NYSE:AMC) in another article, people seek escapism during troubled times. AMC benefits because it presents value-packed entertainment. In a similar fashion, Disney offers that same escapism but through multiple avenues. Thanks to its vast entertainment empire, I see DIS stock moving higher from here.
TJX Companies (TJX)
A quick look at Amazon’s (NASDAQ:AMZN) price chart reveals that the retail markets haven’t found a complete respite. Nevertheless, TJX Companies (NYSE:TJX) could end up being one of the best stocks to come out of this sector.
For one thing, TJX stock has avoided the severe volatility impacting so many other competitors. For October, shares have dropped a little bit less than 3%, which is really nothing. The benchmark exchange-traded fund SPDR S&P Retail ETF (NYSEARCA:XRT) has fallen 6.5% during the same timeline.
Another factor that boosts TJX stock is the underlying company’s business. TJX specializes in off-season, discounted fashion and home goods. During an economic upheaval, everyday low pricing drives foot traffic into stores. Even during an economic upswing, very few people are going to turn down a good deal.
As of this writing, Josh Enomoto is long bitcoin and AMC.