Chaos rarely results in positive outcomes, and the same concept applies to stocks to buy as well.
Unsurprisingly, the consumer sentiment index provided by the University of Michigan saw the gauge hit 61.7 points this month, down 8.2% from January and down nearly 20% on a year-over-year (YOY) basis. Comparing historical trends, these are lows not seen since October 2011, at a time when the economy was working its way out of the Great Recession. Thus, headwinds will likely affect many stocks to buy.
Of course, that’s not the worse of what may be over the horizon. Obviously, we have geopolitical tensions both in eastern Europe and Asia that could easily worsen. Moreover, the Federal Reserve may decide to implement an emergency rate hike this month, although Bloomberg reports that the central bank is still holding off. Nevertheless, runaway prices can’t be left to their own devices indefinitely, putting a cloud over certain stocks to buy.
While there’s no shortage of worries in the market, it’s also important to note that bearish phases represent an opportunity for investors to get onboard companies with relevant businesses — especially if they failed to pull the trigger in the most recent runup. Therefore, here are the best stocks to buy as broader sentiment dips sharply.
- CrowdStrike (NASDAQ:CRWD)
- Lucid (NASDAQ:LCID)
- Twitter (NYSE:TWTR)
- Freshworks (NASDAQ:FRSH)
- Ginkgo Bioworks (NYSE:DNA)
- Vail Resorts (NYSE:MTN)
- Playtika (NASDAQ:PLTK)
Although picking up discounts sounds appealing, we must remember that we’re in an unpredictable situation where myriad domestic and international flashpoints are converging. Therefore, please conduct your due diligence before considering these stocks to buy.
Stocks to Buy: CrowdStrike (CRWD)
Since the last time I comprehensively discussed defense stocks to buy late last month, tensions in eastern Europe have skyrocketed. With Russian forces converging across the Ukrainian border, an invasion seems imminent. Naturally, this circumstance set off a flurry of diplomatic activity as various world leaders attempted to negotiate with Russian President Vladimir Putin.
From the latest news, it appears that none of these high-level discussions have resulted in any change in trajectory. Unfortunately, this leaves Putin in an interesting situation. Why? Because if he were to back down now, rather than forcing concessions from NATO, he would have only accomplished indirectly having Ukraine become even more armed — the exact opposite outcome he was aiming for.
Therefore, it seems that if I’m reading the tea leaves correctly, Russia will do something. That could involve cyberattacks, as the Cybersecurity and Infrastructure Security Agency recently warned. Cynically, though, this dynamic could be a benefit to CrowdStrike and CRWD stock. Specializing in the prevention of data breaches, CrowdStrike has always been relevant; And the latest tensions only ramp up this relevance.
I tend to have a love-hate affair with electric vehicle (EV) related stocks to buy. Yes, I’m aware of the mantra that EVs are the future. However, I think some folks tend to have a herd mentality regarding the upcoming integration of EVs into transportation networks. As author Robert Bryce mentioned last year, it may be time to unplug the hype over EVs.
For one thing, as Bryce points out, there’s not enough support for mainstream integration. “Indeed, the history of the electric car is a century of failure tailgating failure.”
Plus, EVs are expensive. Though they’re coming down in price, they’re also mostly being purchased by the Benz and Beemer crowd. The average household income for EV buyers is about $140,000. That’s twice the U.S. average.
However, that’s where I like the idea of Lucid being one of the stocks to buy during a market correction. Lucid doesn’t make any qualms about catering toward the rich. And you know what? So far, the strategy’s working. The company has sold out reservations for its limited-edition EVs — and these bad boys go for about $170,000.
Stocks to Buy: Twitter (TWTR)
Millions of Americans — and perhaps billions across the globe — are frustrated with the hegemonic influence that big technology firms exert, particularly over issues related to freedom of speech. In part, this backdrop has helped fuel the success of Digital World Acquisition (NASDAQ:DWAC), the special purpose acquisition company (SPAC) that may take Trump Media & Technology Group public.
Of course, TMTG’s flagship product is Truth Social, basically the censorship-free social media platform. On paper, Truth Social’s debut hurts Twitter due to competitive realities: people can migrate away from Twitter to this free-for-all platform. Indeed, on a year-to-date (YTD) basis, DWAC stock is up 71% whereas TWTR stock is down 17% over the same period.
Quite a difference, that. Nevertheless, Twitter could be one of the stocks to buy for contrarians taking a contrarian bet on conservative contrarianism.
I’m not going to sugarcoat it: Twitter and other social media platforms may likely lose subscribers to Truth Social. However, the core of users and the celebrities that drive Twitter will remain where they are.
Billed as a leading provider of modern Software-as-a-Service solutions that solve multiple, complex business problems to companies of all sizes, Freshworks is essentially the one-stop-shop for enterprises’ administrative and marketing needs. From customer service to IT management to human resources to automated service needs, Freshworks does it all.
The company is particularly relevant due to the novel coronavirus pandemic. With multiple organizations implementing work-from-home initiatives, it’s no longer necessary to have every business unit physically tethered to a corporate building. However, businesses will still need vital services to handle various employee concerns, thus potentially driving demand for Freshworks.
However, the market doesn’t quite see it that way. On a YTD basis, FRSH stock is down more than 28%. Since its public market debut, shares have dropped 60%. Initially, this makes shares risky. After all, if a security tanks 60% since its initial public offering (IPO), there’s usually a reason for it.
Nevertheless, the workplace may enter a new paradigm once we’re through with the Covid-19 pandemic. Freshworks helps clients modernize their administrative profile, thus making it one of the contrarian stocks to buy.
Stocks to Buy: Ginkgo Bioworks (DNA)
A biotechnology firm founded in 2009, Ginkgo Bioworks is one of the more fascinating firms available among stocks to buy. Primarily, the company leverages innovations in genetic engineering to produce bacteria with industrial applications. Of course, the concept of genetic engineering gets a bad rap due to certain conspiracy theories. But once the pandemic blows over, Ginkgo could be an intriguing albeit speculative idea.
Self-proclaimed as an organism company, Ginkgo essentially designs microorganisms for customers from a broad spectrum of industries. From scaling Covid-19 testing to optimizing vaccine processes to changing the future of food — and likely its supply chain and distribution — the biotech firm stands poised to deliver remarkable innovations.
Of course, the issue with such businesses is that they tend to be aspirational. Right now, investors don’t have time for such lofty thinking, thus resulting in DNA stock shedding more than 38% YTD. It also doesn’t help that Ginkgo entered the public arena via a reverse merger with a SPAC. Business combinations with shell companies have generally resulted in poor returns.
Still, if you’ve got the stomach for speculation, you may want to add DNA stock to your list of stocks to buy.
Vail Resorts (MTN)
Before I get into a discussion about Vail Resorts, you want to be very careful here. Sure, there’s that little thing about losing 17% YTD, which isn’t necessarily encouraging. But even more problematic in my opinion is that the price action seems very weak. Thus, I wouldn’t be surprised to see an even sharper correction from where MTN stock stands right now at just under $272 per share.
Therefore, while MTN stock may be one of the stocks to buy, I wouldn’t buy it right now. Keep the powder keg dry and let’s see if there are any more discounts ahead. Again, the poor technical posture of MTN stock suggests there might be.
Fundamentally as well, Vail Resorts is challenged. Per the Colorado Sun, the labor shortage crisis has forced the company to offer workers pay bonuses to entice them into employment. Of course, that’s going to cut into the bottom line, especially during an inflationary period where consumers just might skip out to save money.
However, we also must remember that people are eager to reclaim their normal lives, suggesting that vacation spots like Vail Resorts will rise again. In turn, it’s one of the speculative stocks to buy, but perhaps worth consideration for gamblers.
Stocks to Buy: Playtika (PLTK)
Speaking of gambling, people who prefer to treat some of their stocks to buy like high-intensity wagers should take a look at Playtika. As a digital entertainment company based in Israel, Playtika specializes in the development and publication of mobile casino games. From its website, the company mixes art and science to deliver engaging and fully customized game experiences.
Personally, I’m not entirely sure what that all means, considering that this area is hardly my specialty. However, Playtika goes well beyond the normal online casino fare, with attractive titles that I can imagine can hook users with time on their hands.
In a way, PLTK stock is a hedge against an investment like Vail Resorts in that if the Covid-19 pandemic doesn’t get better, Playtika could cynically rise. Through its engaging platform, Playtika helps connect gamers throughout the world. Add in the possibility of winning money and you might have a hit with PLTK stock.
However, this will be a risky idea. With a trailing-year loss of almost 45%, it’s not an investment to take lightly. Still, if you like living dangerously, there might be something here for you.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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.