There’s some speculation that the real unemployment rate this week could hit 15%. But rather than headed down a deeper hole, the market seems to moving past this stunning number in hopes COVID-19 will pass sooner rather than later and the US economy will get back to work.
Whatever happens, the reality is, no one knows much about anything here. And instead of trying to time a bottom, or pick the hot sectors now, or predict which quarter the economy will resurge, just do one simple thing:
Buy quality.
That’s it. That’s your best bet for now and for the future. These 7 A-rated stocks to buy for strength are all top-rated stocks in my Portfolio Grader:
- CoStar Group (NASDAQ: CSGP)
- Chemed (NYSE: CHE)
- Shopify (NASDAQ: SHOP)
- Lockheed Martin (NYSE: LMT)
- Costco (NASDAQ: COST)
- NVIDIA Corp (NASDAQ: NVDA)
- NextEra Energy (NYSE: NEE)
For now, many investors will be looking for the safety of quality stocks. And when good times return, high-quality growth stocks like the ones I recommend at Growth Investor are the companies best built to take advantage quickly.
CoStar Group (CSGP)
CoStar is a unique company in the real estate sector. It provides information, analytics and marketing to the commercial real estate sector.
In a world where things have changed so swiftly in just a matter of weeks, the first thing businesses of all types are going to have to examine is how best to move forward.
And one the biggest expenses on their books is real estate. Whether it warehouses, office buildings or anything in between, right-sizing space will be crucial. And CSGP is one of the best in this new and fast-growing business.
The company has been around since 1987 and is headquartered in Washington, DC but serves not on the US and Canada, but the UK, Spain, Germany and France as well.
The stock is up 33% in the past 12 months. More impressively, it’s up 7% year to date, a significant relative outperformer.
Chemed (CHE)
Chemed is an interesting union of two business divisions that aren’t necessarily sexy, but are durable and necessary. And the Cincinnati, Ohio, company has been around since 1970, so that durability should be self-evident.
Its two divisions are VITAS and Roto-Rooter. VITAS offers hospice and palliative care using a team of professionals from doctors to clergy and volunteers. VITAS is the leading provider of end of life care and has nearly 50 hospice programs in 14 states and Washington, DC.
Roto-Rooter is a franchise that offers plumbing services for commercial and residential clients. And it’s the largest of its kind in the US. It actually got its big start during the Great Depression, giving people a chance to start a necessary business with little training and a constant demand.
The stock is up 42% in the past 12 months, and almost 3% year to date. These are two solid sectors that will continue to deliver. And I’ve got more where that came from.
Shopify (SHOP)
Shopify is an online commerce platform for small and medium-sized businesses.
Given the state of the economy and the soaring unemployment numbers, there’s a good chance many of those people out of work won’t have jobs to return to for quite a while.
If you recall, this is what happened in 2008 and was the real power behind the ‘gig economy’ movement, when fee-for-services jobs blossomed for a new generation. You can expect the same thing to happen again.
Many older workers will be replaced with younger, cheaper workers. And middle management will get replaced by productivity software and other structural moves.
That leaves a lot of people looking for work in sectors built without those jobs for now. Starting a small business as a contract worker or turning a hobby into a business it what Shopify allows these workers to do.
The stock is up a whopping 125% in the past year, and 25% year to date. It’s not cheap, but in this market you can afford to be patient or buy in over time.
Lockheed Martin (LMT)
Lockheed Martin is the largest defense contractor in the world. Net sales for the company in 2019 were nearly $60 billion.
When there is instability in the world – whether that comes as a virus or a repressive regime – defense companies stay busy. When there is significant geopolitical change brought on by rogue actors or power shifts among superpowers, defense companies stay busy.
Needless to say, LMT workers do not have idle hands now, nor will they in coming years.
Also, because these companies are so big – they have divisions all over the US – boosting defense spending is a win-win for politicians. It shows they’re tough and it also boosts the economy. In an election year, both are very important.
The stock is still reasonably valued given its potential and it continues to perform. It’s up 19% in the past 12 months, and off a mere 4% year to date. Plus, it delivers a reliable 2.6% dividend. Growth and income is a hallmark of many of the stocks I recommend for Growth Investor.
Costco (COST)
Costco is a major membership warehouse wholesaler that caters to everyone from small businesses to bulk shoppers, especially those with larger families.
Everything is super-sized but the quality is usually top-notch, name brands are available and the size of the company means it has significant purchasing power for its house branded items.
For example, it is one of the largest wine buyers in the world, so it can go to quality wineries and place massive orders for great wine at a bargain price. The same goes for most of its products.
Also, given the runs on groceries and other essential items, its members-only status keeps down the crowds. And the super-sized items give consumers a head start on stockpiling.
This is a company that is doing well now and will continue to thrive, as it did before the lockdown. The stock is up 26% in the past year and almost 6% year to date, with a 0.8% dividend.
Nvidia (NVDA)
Nvidia is one of those companies that symbolizes the next generation in computing.
Initially starting out as a builder of high-end graphics processing units (GPUs) for institutions, researchers and gamers, it is now one of the leading tech companies in the world.
GPUs have become the game changer in so many of the new cloud-based industries that it went from a funky niche company to major player in a matter of a few years.
Around 5 years ago, the stock was trading in the low 20s, where it had traded for years. Now, it’s trading near 290, and has a $172 billion market cap.
But it has seen volatility, as many tech firms have. And the competition is heating up because they now see the huge opportunities moving forward. But Nvidia is still leading the pack in robotics, drones, smart vehicles, big data, you name it.
The stock is up 50% in the past year, and up almost 20% year to date. It’s a bit pricey, but for that kind of performance in this kind of market, a premium isn’t a surprise.
NextEra Energy (NEE)
Next Era Energy is the world’s largest producer of wind and solar energy. It’s also a regulated electric utility in south Florida.
This gives it both a growth engine and a solid base of regulated revenue. You see, the renewable energy it owns is sold to companies and other utilities for carbon credits to offset their dirtier fuel outputs. And now more companies are also seeing the advantages of having reliable power as the electrical grid becomes increasingly unreliable with no real interest in the federal government or industry to upgrade it.
This is the current growth engine for NEE. However, its FPL (formerly Florida Power and Light) has been around a very long time and has a lock on the most dynamic and wealthiest part of Florida. And there are plenty of snowbirds who went south to wait out COVID-19, so demand should be strong.
The stock is up 26% in the past 12 months, and year to date it’s treading water. It also comes with a respectable 2.4% dividend.
It just goes to show, there are still great dividend investments out there, as my Growth Investor subscribers can tell you. And with bond yields so low (even negative, in some cases!) dividend stocks are leading the way out of this bear market.
Now that we’re hearing from analysts and companies during earnings season, I expect growth stocks to follow … at least, the ones who have what it takes, like my Netflix of 5G.
The 5G Buildout Is an Incredible Opportunity for Investors Right Now
Within two years, most cell phones will be 5G enabled and be able to wirelessly handle television streaming. With 5G, we’ll have cable modem speeds on any device; no need to plug in. That’s a big deal for rural areas … the very same areas that are also key to President Donald Trump’s reelection. So, by pushing 5G over the goal line, Trump will deliver a big win for his base — and strike a blow against Chinese rivals like Huawei Technologies.
But, in the big picture, 5G is about much more than trade wars and faster downloads. Because 5G is 100 times faster than 4G, it’ll allow your internet devices to work in real time. That advancement is a game changer for tech companies.
With the 5G infrastructure market set to grow at an annual rate of 67% over the next 10 years, the entire market will go from $780 million to nearly $48 billion. This buildout is where I see opportunity with 5G stocks now.
Cable companies can do their best to fight back with fiber optics … but they can’t compete with the convenience of a smartphone, once it’s got ultra-fast 5G. That’s how my 5G infrastructure play will capture more market share from the broadband cable companies.
The stock I’m targeting is a favorite on Wall Street, and it has strong fundamentals, too — making it a “Buy” in my Portfolio Grader system.
When you do, you’ll see how to claim a free copy of my new stock report, The Netflix of 5G, which has full details on this company — and what makes it such a great investment.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
