A lot of great stocks are on sale right now. Companies that are household names have seen their share prices pushed down in recent months due to factors ranging from shifting investor sentiment, a rotation out of and then back into technology stocks and disappointing financial results.
Whatever the reason, the current downturn presents a buying opportunity for savvy investors who have long-term time horizons. Stocks of great companies that have excellent future prospects are ripe for the picking.
And the best part is that the share prices of many of these bargain stocks appear to have bottomed heading into this year’s second half and are now on an upswing, enabling investors to immediately start realizing gains.
Let’s have a look at the seven best stocks to buy now if you want to get in at the bottom.
- Tesla (NASDAQ:TSLA)
- Southwest Airlines (NYSE:LUV)
- Citigroup (NYSE:C)
- Deere & Company (NYSE:DE)
- The Walt Disney Company (NYSE:DIS)
- Alibaba (NYSE:BABA)
- DraftKings (NASDAQ:DKNG)
Stocks To Buy Now To Get In at the Bottom: Tesla (TSLA)
Not long ago, electric vehicle maker Tesla could do no wrong. TSLA stock was one of the best performers of 2020, having risen 697% during the calendar year. However, 2021 has been a different story.
Year-to-date, Tesla’s shares are down 6.9%. The company’s current stock price of $656.95 is 27% below its 52-week high of $900.40 per share reached in late January. The good news for investors is that the stock looks to have bottomed on June 3 at $572.84 and has climbed 9% over the past month.
Further gains in Tesla stock are likely as investors shake off the threat of higher interest rates and again put money into technology growth stocks. Of course, Tesla continues to grapple with several challenges, including a massive vehicle recall in China, regulatory investigations into the safety of its vehicles at home in the U.S. and rising competition from established automakers such as General Motors (NYSE:GM) and Ford (NYSE:F) that are aggressively expanding into the electric vehicle market. But for now, Tesla’s stock appears to be back in the good books with investors.
Southwest Airlines (LUV)
Shares of Southwest Airlines have tanked in the past month, down almost 14% since the start of June. This at a time when U.S. travel is exploding coming out of the pandemic. Yet Southwest, which flies more Americans on domestic flights than any other U.S.-based carrier, has been hobbled by a shortage of pilots and cancelled flights. The Dallas, Texas-based company is scrambling to replace more than 600 pilots who either took early retirement packages or went on voluntary leave during the pandemic.
The pilot shortage has forced Southwest Airlines to cancel more than 2,500 flights in the last month. Adding insult to injury, more than 34,000 of the airline’s flights have been delayed since June 1.
Investors appear to be as angry about the situation as passengers, and LUV stock has fallen 16.7% in the last three months. However, Southwest is working to rectify the situation and the company’s stock looks like it may have bottomed right around $50 a share on July 8. Since then, the share price has ticked up 4% to $52.20, with (hopefully) more gains coming.
Citigroup has been the worst performing of the major American bank stocks this year. While stocks of other big banks such as JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC) have risen more than 20% year-to-date, C stock is up a tepid 13% at its current price of $68.45 a share. In the past month, Citigroup’s share price has come down 13% and it now sits 15% below its 52-week high of $80.29 reached on June 2 of this year.
Citigroup’s stock has been hurt by weak forward guidance. The lender warned in early June that its trading revenue will likely decline by 30% this year on low deal volumes. The lender reports its second quarter results on July 14, and analysts forecast that revenues will come in at $17.68 billion, which would be 10% lower than the second quarter of 2020.
Any unexpected positive news to come out of the latest earnings will likely send C stock higher. It does have a nice streak of earnings beats. The shares look to have bottomed at $66.73 a share and are now starting to slowly trend upwards again.
Deere & Co. (DE)
The U.S. is supposed to be in an infrastructure and consumer spending boom. So it seems odd that the manufacturer of John Deere tractors and lawn mowers would see its stock struggle. Yet DE stock fell 18% from a 52-week high of $400.34 reached in early May to a $328.38 per share bottom in mid-June.
The good news for shareholders is that Deere & Company’s share price does look to have bottomed and has gained 7% to reach its current price just shy of $350 a share. With the summer construction season now in full swing, the stock should continue to climb in coming months.
The pullback in DE stock has been a bit of a mystery given the state of the U.S. economy and the company’s positive outlook. Deere has said that it expects net income for fiscal 2021 to come in between $5.3 billion and $5.7 billion. The mid-point of that range would represent a year-over-year improvement of 100%.
Also, Deere & Co. has acquired Wirtgen, the world’s leading road-construction equipment maker. The addition of Wirtgen should help Deere & Co. secure lucrative contracts as governments around the world spend on major infrastructure projects.
The Walt Disney Company (DIS)
Disney’s latest movie in the Marvel comics book franchise, “Black Widow”, premiered over the past weekend in movie theatres and on the Disney+ streaming platform.
It racked up a “dazzling” $80 million in theatres and $60 million on the company’s streaming platform. For Disney, Black Widow’s premier is the latest sign that the House of Mouse is back on track after its film and theme park business were forced into hiatus by COVID-19.
Yet DIS stock has been a disappointment in recent month. After notching a 52-week high of $203.02 in March, Disney’s share price slumped 17%. Fortunately, the stock looks to have found a bottom at $169 a share and has been flirting with $177 at the latest.
With a slate of blockbuster films on deck and its theme parks reopening around the world, the hope is that Disney’s share price will continue moving in the right direction and shake off concerns that the Disney+ streaming service will be unable to sustain the subscriber growth it enjoyed during pandemic lockdowns.
Chinese stocks listed on U.S. exchanges have had a rough go of it this year. And e-commerce giant Alibaba has been particularly hard hit by the downturn in investor sentiment towards Chinese securities.
Year-to-date, BABA stock is down 10% at its current level of $204.34 a share. The stock is now down 36% from its 52-week high of $319.32 achieved in October of last year. The stock hit a 52-week low of $199.85 on July 8 and managed to crawl back above $200 a share the very next trading day.
Investors will be hoping that Alibaba’s stock has now bottomed and can, at the very least, stay above the $200 mark.
It would help if authorities in China stop their crackdown on domestic technology companies such as Alibaba and others. The Chinese technology company that is often compared to Amazon (NASDAQ:AMZN) was hit with a record fine of $3.6 billion by Chinese regulators for allegedly “abusing its market dominance.” Alibaba founder Jack Ma continues to keep a low public profile as authorities in Beijing continue to run roughshod over domestic firms.
Investors would need to have a lot of fortitude to gamble on DraftKings shares this year. The Boston-based fantasy sports and online betting operator has seen its stock fall 11% in the past month to $48.52. DKNG stock has struggled to stay above $50 and are 35% below their 52-week high of $74.38. The decline is especially frustrating given the return of both professional and amateur sports. The pullback since the start of June has come despite the NBA and NHL playoffs, as well as the European soccer championships.
Overall, analysts remain bullish on DKNG stock. The median price target on the shares is $74 a share, which would represent a 53% gain from its current level. The stock has largely been hurt by negative media reports accusing the company of illegal gambling. However, most of the sources for the negative stories have been short-sellers who are betting on DraftKings stock to decline.
DKNG stock is currently back at the same bottom it reached in mid-June before moving up as high as $52.71 a share. Hopefully $48 remains the stock’s bottom and it can again recover.
On the date of publication, Joel Baglole held long positions in LUV, C, DIS, BABA and DKNG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.