Editor’s note: “9 Stocks to Buy This Month” was originally published July 9, 2020. It is updated monthly to reflect the current state of the markets and best stocks to buy for that month.
Around this time last month, I noted that former Vice President Joe Biden held a commanding lead based on the latest polls. Because of his consistent lead, many assumed that he would have a reasonably comfortable victory over incumbent President Donald Trump. However, when crunch time came, the results were much tighter than most imagined. Surely, this will “mitigate” the approach toward the best stocks to buy this month.
What do I mean by that? While Biden’s victory in a sense was a repudiation of the Trump administration’s handling of the novel coronavirus pandemic, it’s evident that roughly half of the American people did not view the Democrats’ position as resoundingly superior to the status quo. Therefore, you can’t just throw caution to the wind and focus on stocks to buy that perform well under liberal rule.
To emphasize the point, the blue wave that the mainstream media trumpeted came to a surprising crash when Republicans actually made some key pickups. Therefore, if Biden and the Democrats want to maintain their power and influence, they can’t go rogue relative to middle-of-the-road ideologies that perhaps align with most voters.
That’s not to say that we don’t have any direction that investors can advantage. To the contrary, we have many issues that the Biden administration must address, from the coronavirus to fostering an economic recovery. And his leadership and ideological principles will impact these stocks to buy for November.
- NextEra Energy (NYSE:NEE)
- Home Depot (NYSE:HD)
- American Well (NYSE:AMWL)
- Smith & Wesson Brands (NASDAQ:SWBI)
- Albertsons Companies (NYSE:ACI)
- Wheaton Precious Metals (NYSE:WPM)
- Nike (NYSE:NKE)
- Novavax (NASDAQ:NVAX)
- Sociedad Quimica y Minera de Chile (NYSE:SQM)
Because this is 2020, the year of surprises, let me be fair and state that President Trump is contesting the election results. It’s possible that he can make the transition of power incredibly difficult, which doesn’t augur well for social stability.
In other words, just because the election is over doesn’t mean it’s over in alternative realities. Therefore, we could still very much have a wild ride in November, which will likely bolster the case for these best stocks to buy.
Stocks to Buy This Month: NextEra Energy (NEE)
Back during the second and final presidential debate, President Trump adopted a new strategy: let Joe Biden speak and hope that he bumbles his way into contradictory or confusing statements. Sure enough, the former Vice President did just that when it came to the issue of fracking.
According to the Biden Plan, his administration will lay the framework for the U.S. to achieve net-zero emissions by no later than 2050. Therefore, his green stance wasn’t a surprise. However, what worried many investors is that, while his policies would be supportive of companies like NextEra Energy, they would do away with the fossil-fuel industry. But the situation is a bit more nuanced.
Irrespective of political opinions, investors ought to consider NEE stock. For one thing, NextEra Energy enjoys a demographic tailwind: the emerging generations care deeply about environmental sustainability. Certainly, the wildfires at least optically boosted the argument about the reality of climate change. Also, conservatism and responsibility aren’t partisan issues. From what I understand, Republican voters also like to breathe clean air.
On the other hand, NEE stock likely will not be a complete replacement for fossil-fuel based investments. Rather, due to our growing population and rising energy consumption, we need all the power sources we can get.
Home Depot (HD)
As a home repair and renovation specialist, Home Depot is simply one of the best stocks to buy in any environment. Bull market or bear, Murphy’s law doesn’t care. I learned that lesson the hard way when my smoke detector started screaming at three in the morning – it’s always three in the morning, isn’t it? – forcing me to replace the batteries.
Fortunately, I was prepared. I had my 9-volt batteries and a telescoping ladder. Further, I have an ample set of tools and accessories should anything else go awry. The pandemic has been a lesson of basic preparedness for all of us, driving the narrative for HD stock.
Another reason to consider shares is that 2020 is turning out to be a rotten year. From the pandemic to economic woes to outbursts of violence throughout this nation, we’ve been through a lot. The good news is that we’re in the final stretch.
Still, we’ve suffered a record-breaking hurricane season and unusual climate events, among other things. Honestly, who knows what surprises await us? That’s why I’m not going to entirely dismiss Trump’s election results battles until it’s truly over. While this is somewhat of a cynical play, I believe having some exposure to HD stock makes sense.
American Well (AMWL)
With the very real possibility of a second wave, the case for telehealth investments in your portfolio of stocks to buy makes fine sense. Typically, that equated to Teladoc Health (NYSE:TDOC). And believe me, when I look at the rising infection numbers in the U.S., TDOC sounds awfully enticing.
At the same time, Teladoc shares have skyrocketed this year. For those who want an alternative, you should consider American Well. As a direct competitor in the telehealth industry, AMWL stock offers similar exposure to a relevant market. Plus, with patients having become acclimated to the new normal, they may be looking for service/package alternatives. This should also help lift the case for AMWL.
Of course, you should be aware that American Well recently had its initial public offering. Therefore, it’s too early to say whether AMWL stock will perform like TDOC did during this pandemic.
However, we still have social tensions despite the election having come to an end (on my side of reality). You just don’t know how people will react, considering the economic turmoil we’ve suffered. Cynically, this may support the bullish argument for American Well.
Smith & Wesson Brands (SWBI)
When former Vice President Joe Biden picked Kamala Harris as his running mate, President Trump predictably launched into attack mode. Presumably, many conservatives licked their lips because they viewed Harris as a liability. However, Harris arguably has a likable personality and that may have contributed to the ticket’s eventual victory.
But whatever you think about Biden’s pick, one thing is for certain: it sent a chill down gun advocates’ spine. When it comes to gun control, Harris is very liberal. As MarieClaire.com argues, the pair could enact major gun control legislation once in office That’s not great news for the Second Amendment but is a strong catalyst for Smith & Wesson Brands.
Granted, SWBI stock faces longer-term pressure under a liberal administration. But before the Biden administration shows its cards regarding new gun control legislation, the firearms industry may enjoy robust sales as people fear missing out.
Moreover, you have catalysts for SWBI stock outside of direct political motivations. Primarily, people are scared of rising chaos in society. The worse things get, the more likely they’ll turn to Smith & Wesson for protection.
Albertsons Companies (ACI)
When rumors started circulating that the coronavirus was coming to a neighborhood near you, Americans did what came naturally to them: rush to the store for toilet paper. But I shouldn’t just point the spotlight on our country. Several others, including the Aussies, also panic-bought supplies for their hind ends.
Suddenly, grocery stories like Albertsons Companies and Kroger (NYSE:KR) became the hottest places to go to. Recently, I browsed through my photos library on my iPhone. On March 8 of this year, 99% of the toilet paper at my local Kroger (Ralphs) store was gone. In theory, a second wave should bode very well for ACI stock.
If I had to bet, I’d say that now is a great time to consider the grocery store narrative again. According to data from the Centers for Disease Control and Prevention, new daily coronavirus infections exceeded the 134,000-case level on Nov. 10. Further, to address the surge of panicked shoppers, some stores are limiting toilet paper and disinfecting wipe purchases.
It might be happening again, which is a cynically powerful catalyst for ACI stock.
Wheaton Precious Metals (WPM)
It seems like no matter what the market environment, gold is always risky. Therefore, you should take the idea of Wheaton Precious Metals being one of the best stocks to buy with a grain of salt. It’s not that I don’t believe in WPM stock because I do. Rather, this is a sector that has produced much disappointment.
Still, I hate to use this phrase, but this time could be different. For one thing, it is different. While we’ve suffered serious pandemics before – most notably the H1N1 pandemic of the late 2000s – we’ve never seen state and federal governments impose stay-at-home orders. Unsurprisingly, this imposed a hard stop on the economy, making WPM stock quite intriguing.
Primarily, the doom and gloom prognostications that will shoot gold to five-digit prices are just a tad more credible today. Frankly, the Federal Reserve doesn’t have many monetary weapons other than to adopt as accommodating a policy as possible. Theoretically, this should be very good for gold.
I also like Wheaton for its business model. As a streaming company, Wheaton doesn’t have the direct risks associated with all-or-nothing mining projects.
At first glance, the storyline for Nike being among the stocks to buy may not be that appealing, especially during this crisis. It’s not just about health concerns, though that is obviously a real threat. Rather, we have a severe economic emergency as well. As I mentioned near the top, permanent job losses have accelerated worryingly, contradicting the implications of an otherwise positive August jobs report.
Despite the terrible optics, NKE stock still enjoys bullish fundamentals. For one thing, we’re seeing a bifurcation in the economy. A great example is unemployment by race. Only white workers collectively enjoy a single-digit unemployment rate. Second, the unemployment rate for college-educated workers is 5.3%, which is far better than the rest of the nation.
In other words, those who work higher-paying office jobs have been insulated from this crisis. Indeed, because they don’t have to commute, the pandemic has been a financial boon. Better yet, they’re willing to spend, bolstering bullishness toward NKE stock.
When the novel coronavirus ceased to be an exotic, foreign problem to a very real domestic crisis, arguably everyone had the same opinion: we need a vaccine to get society back on track. The major problem of course is that vaccines are notoriously difficult to develop and take years to distribute to the public.
But because of the urgent need for a solution, the Trump White House threw everything it had against the pandemic via its Operation Warp Speed initiative. One of the beneficiaries was Novavax. Once on life support, its subunit vaccine candidate could play a significant role in attacking Covid-19.
While Pfizer (NYSE:PFE) received most of the media’s attention due to its potentially highly effective vaccine, the Food and Drug Administration also granted fast track designation to Novavax’s coronavirus solution, boosting the narrative for NVAX stock.
Also, Novavax has been fortunate to avoid major hiccups. For instance, a U.K. clinical trial patient that took a vaccine candidate made by AstraZeneca (NASDAQ:AZN) suffered an “unexplained illness.” This was followed up more recently by a clinical trial pause by Johnson & Johnson (NYSE:JNJ) for its Covid-19 vaccine candidate.
This isn’t to say that NVAX stock will fly on an eventual approval of Novavax’s vaccine. However, given the safety profile of subunit vaccines, there’s a solid chance that NVAX could pleasantly surprise investors.
Sociedad Quimica y Minera de Chile (SQM)
Everybody is going crazy for electric vehicles these days. Despite the counterintuitive nature of this sector – why buy anything expensive during a health and economic crisis? – EV-based investments continue to defy gravity. However, picking individual stocks to buy in a particular month is a difficult task.
So, my solution is don’t bother. Instead, go for a company that specializes in the one commodity that all EVs require, lithium. For a mixture of growth potential and relative stability, you should look into Sociedad Quimica y Minera de Chile.
As one of the leading producers of lithium, Sociedad has enjoyed tremendous momentum following its March doldrums. Since around mid-May, SQM stock has formed a strong bullish trend channel. Because enthusiasm is so strong for companies like Tesla (NASDAQ:TSLA), I believe the upside movement is sustainable.
As I said earlier, SQM stock is a play on broader EV enthusiasm and not a specific manufacturer. Therefore, you don’t have to worry so much about consumer tastes, so long as they remain fixated on electric cars.
On the date of publication, Josh Enomoto held a long position in gold.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.