The markets continue to surprise investors. We get terrible economic news and the markets rally. Nothing happens and the markets sell off. In the midst of this, investors should look for the best large-cap stocks.
It’s happening again this week. We see a glimmer of hope about a vaccine and the markets go nuts.
The trouble for individual investors is, they invest, they don’t trade. So all this volatility makes buying even more confusing.
The fact is, traders will take advantage of the small opportunities because they will sell them the next day if need be. Investors settle in with quality companies and look to make money over the long haul.
There’s still a way to invest these markets. And one of the most fundamental strategies is to buy quality, large-cap stocks.
The reasons are simple. Large-cap stocks have the size to weather storms. They make products the economy relies upon. They can access capital if need be. And they have likely seen this kind of thing before.
I have selected seven of the best large-cap stocks to buy now. They’re all A-rated by my Portfolio Grader I use to find Growth Investor plays, and they can weather the storm and get under steam quickly when it’s all over.
- Old Dominion Freight Line (NASDAQ:ODFL)
- DocuSign (NASDAQ:DOCU)
- Franco-Nevada (NYSE:FNV)
- Clorox (NYSE:CLX)
- Leidos (NYSE:LDOS)
- Regeneron Pharmaceuticals (NASDAQ:REGN)
- Microsoft (NASDAQ:MSFT)
Large-Cap Stocks: Old Dominion Freight Line (ODFL)
Old Dominion Freight Line (NASDAQ:ODFL) started in 1934, the teeth of the Great Depression, so it was built to survive tough times.
It started as a trucking company with one truck, running between Richmond and Norfolk, Virginia. Since that time, it has expanded to a global shipping and logistics company specializing in truckload shipping, as well as warehouse space and supply chain consulting. It operates nearly 6,000 tractors and 23,000 trailers.
With everyone sheltering in place, e-commerce has boomed and that means ODFL has been kept very busy moving essential and consumer goods. When the economy opens back up, it will also see increased demand as businesses ramp up to get back to normal.
The stock is up 25% in the past year and nearly 3% year-to-date. It also has a diverse customer base, so it won’t be affected by one major customer.
DocuSign (NASDAQ:DOCU) is a play on the new online world we’re beginning to work and live in. It is one of the leading electronic signature solutions firms out there, and a pioneer in the sector.
The goal of a successful company with a low barrier to entry is to build a moat by getting more people to use your solution. And that is what DOCU has done. It has built out its cloud-based platform across the globe — it now has more than 500,000 paying customers (it has free products) and millions of users in over 180 countries.
Most of the top tech firms in a variety of industries use it — and it’s approved by 800 federal, state and local governments as well.
And in these remote times, it becomes even more important. Beyond just financial and real estate transactions, it’s about contracts, non-disclosure agreements, memorandums of understanding, you name it. It’s also taking advantage of the great technological breakthrough of our age to help customers sort through the complex documents they’re expected to sign.
The stock is up 93% in the past year and it’s up 37% year-to-date.
Franco-Nevada (NYSE:FNV) is one of the more interesting ways to play gold. It doesn’t own gold mining operations, it owns the land that gold and other strategic metal miners use to find gold and metals.
When they sell their goods, FNV gets a cut. It also leases the land, so it get monthly rent checks as well.
When the dollar loses strength, gold becomes a much more attractive investment, since the cost to own it is lower. In this crazy time, the dollar and the price of gold have been bouncing around. But in the end, gold is a go-to hedge against stocks and bonds — and better than cash.
And the best part: FNV outperforms gold when gold is hot. For example, gold is up 34% in the past year and 13% year-to-date. FNV is up a whopping 75% in the past year and 20% year-to-date. Plus, it has a 0.8% dividend, which is better than your savings account.
Clorox (NYSE:CLX) has been around since 1913. And for the first four or five decades, all it sold was bleach. Granted, it’s not solar panels or space planes, but that’s precisely the point. It grew to become a major national brand with one of the most mundane products imaginable.
And it has managed to build a moat around its business for over a century, with slews of competitors constantly nipping at its heels.
And it’s a dividend aristocrat, paying and increasing its dividend for more than 43 consecutive years. That dividend now sits at nearly 2.2.%, which is much better than having the cash sit in a bank or CD.
What’s more, the stock is once again hot during this Covid-19 pandemic. Who better to turn to when you need cleaning and disinfecting products? And who can ramp up production and distribution like CLX? Very few companies.
The stock is up 25% in the past year and 25% year-to-date. It’s not sexy, but it’s durable and reliable, and every portfolio needs a few of these kinds of large-cap stocks. I will say, however, that it’s not a growth stock. When you’re ready to focus there again, here’s a great place to start.
Leidos (NYSE:LDOS) is what I like to call a roots-and-wings company. It was developed in 1969 to help the federal government with scientific, engineering and IT solutions.
These were major projects like analyzing the effects of nuclear weapons, or developing radiation-based cancer therapies. It helped develop the clean-up strategy for Three Mile Island’s meltdown.
Today, it works a great deal with the defense and intelligence sectors. And its newest foray is in aerospace and space technologies.
This is what I’m talking about. Roots in complex problem solving that have given it wings into the U.S. Space Force.
There are going to be plenty of problems to solve as we resolve the current situation, and you can be sure that LDOS will be a part of many of those solutions.
The stock is up 52% in the past year and up almost 1% year-to-date. It’s been quite a worthwhile investment for us at Growth Investor.
Regeneron Pharmaceuticals (REGN)
Regeneron Pharmaceuticals (NASDAQ:REGN) has been around since 1988, and has eight drugs currently in the market as well as a nearly 30 drugs in some stage of its development pipeline.
These drugs run the gamut from Ebola treatments to treatments for blindness in the elderly and atopic dermatitis. These aren’t blockbusters, but to survive and grow as a big pharma, you need base hits as well. They keep the revenue coming in year after year, and help fund the swing-for-the-fences projects.
Currently, the latter is a new look at its rheumatoid arthritis drug Kevzara as a treatment for Covid-19. It’s already in advanced trials in Spain, France, Germany, Japan, Canada and Russia. And there was talk that New York may use it for human trials.
Granted, being one of the first to market a Covid-19 cure would be huge, but the real value here is that the company continues to develop medicines that have a market. It’s not clinging on the profits of one medicine for its future.
The stock is up 70% in the past year and 51% year to date. This is a hot sector now, but REGN will be there after the hype is gone.
Microsoft (NASDAQ:MSFT) is one of the best large-cap stocks in America at this point. It doesn’t stand out just among tech companies, but among all companies.
It has a $1.3 trillion market capitalization, even as we deal with a global pandemic. Its cloud services are growing like kudzu and its software is a recurring revenue gold mine. So much so that it’s made a major investment into the biggest software innovation of our time. And now it also has finally hit the mark on its hardware as well.
Its computers are becoming true competitors with its long-time nemesis Apple (NASDAQ:AAPL).
The transformation didn’t happen overnight but it has happened, and that is important to investors. This whole lockdown is also deepening its relationships with individuals and businesses.
And while Zoom (NASDAQ:ZM) may have grabbed the headlines in video conferencing, I’m betting MSFT is upgrading Skype as we speak to be a more able competitor in this market in coming quarters.
The stock is up 45% in the past year and 11% year to date. Those are very impressive numbers for one of these large-cap stocks. It also has a solid 1.2% dividend.
What I especially like about Microsoft is that it’s smart enough not to remain a legacy PC brand like Dell Technologies (NYSE:DELL). It’s investing heavily in technology of the future, from the cloud to “the mother of all technologies”: artificial intelligence (AI)
The AI Master Key
If artificial intelligence sounds futuristic, even far-fetched — well, keep in mind, you’re already using it every day. If you’ve ever used Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Assistant or Apple’s (NASDAQ:AAPL) Siri … if you’ve had Netflix (NASDAQ:NFLX) recommend a movie or Zillow (NASDAQ:Z) recommend a house … even an email spam filter … then you’ve used artificial intelligence.
In this new world of AI everywhere, data becomes a hot commodity.
As scientists find even more applications for artificial intelligence — from hospitals to retail to self-driving cars — it’s incredible to imagine how much data will be involved.
To create AI programs in the first place, tech companies must collect vast amounts of data on human decisions. Data is what powers every AI system. As one AI researcher from the University of South Florida puts it, “data is the new oil.”
To cash in, you’ll want the company that makes the “brain” that all AI software needs to function, spot patterns and interpret data.
It’s known as the “Volta Chip” — and it’s what makes the AI revolution possible. Its stock is a “Strong Buy” in my Portfolio Grader now.
You don’t need to be an AI expert to take part. I’ll tell you everything you need to know, as well as my buy recommendation, in my special report for Growth Investor, The A.I. Master Key. The stock is still under my buy limit price — so you’ll want to sign up now. That way, you can get in while you can still do so cheaply.
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.