Stocks have really come down this year: The S&P 500 ETF Trust (NASDAQ:SPY) is down 15% year to date, and the Nasdaq 100 market, Invesco QQQ Trust (NASDAQ:QQQ), is down even more: 25%. Forget about the best stocks to buy — investors are running in fear.
That is painful for stockholders but could be an opportunity for stock buyers. For those who are waiting for a buying opportunity, the more that stocks are down from their highs, the better the price they get.
It is scary to buy stocks when they are declining, but there are stocks that have good fundamentals, promising outlooks and substantial financials that are definitely worth a look. The stocks on this list are among those that investors should consider as the best stocks to buy in these times.
If you find that the risk of investing is great but have consulted with financial professionals and feel that you can afford the risk, at least for a portion of your assets, and you want to invest to accomplish your financial goals, you could use investment methods such as dollar cost averaging, as outlined by Investopedia.com.
Keep in mind that fundamentals, such as price/earnings multiples and earnings, are important in this market when looking for the best stocks to buy. Story stocks without earnings and other fundamental backing have been heavily sold in this risk-off market atmosphere.
|Helen of Troy
|Option Care Health
|Science Applications International
Meta Platforms (FB)
Meta Platforms (NASDAQ:FB) is down about 43% year to date but has strong fundamentals and could rebound over time in a stronger market. Meta has a P/E ratio of 13.9, with a PEG of 1.18, which is quite reasonable.
Ali Mogharabi, senior equity analyst at Morningstar, wrote a note on May 19 saying that because of increasing competition and margin pressure, among other factors, FB stock declined more than its fundamentals would warrant. He reiterated Morningstar’s opinion that Meta was selling at half of its fair value estimate of $384, and that FB was a very attractive “buy.” This makes FB one of the best stocks to buy for June.
FB is the largest social networking company in the world and has over 2.5 billion active monthly users. The biggest source of its revenue is from advertising, which comprises well over 90% of the company’s total revenues.
Cirrus Logic (CRUS)
Cirrus Logic (NASDAQ:CRUS) may be down about 17% from its 52-week high, but it’s still one of the best stocks to buy.
Cirrus is a fabless semiconductor company. The company designs its semiconductor chips, sends them to a fabricator and then sells the manufactured chip to customers. This allows CRUS to save on manufacturing costs and benefit from its research and development of products. The company’s customers are all over the globe, and most of its products are high precision and portable.
Its sales should remain strong. On May 3, Cirrus’s president and chief executive officer, John Forsyth, announced that for the fiscal year 2022 revenues increased 30%.
Going forward, he continued, “we expect to continue leveraging our expertise in data conversion and signal processing to capitalize on exciting opportunities in new applications and markets.” Company GAPP gross margins were at an impressive 51.8%.
TD SYNNEX (SNX)
Another company that should be considered among the best stocks to buy is the global solutions and cloud services company TD SYNNEX (NYSE:SNX), which is down about 25% from its 52-week high. On May 19, Business Wire reported that SNX expanded its cloud solution portfolio by adding Google Cloud; this will provide its customers with a cloud service that will increase their productivity and efficiency.
Synnex’s senior vice president said that this addition would make Synnex a leading distributor and make the company the leader of cloud service in the U.S., Canada, the U.K., and France. Other experts say that global companies are increasing digital transformations and Google Cloud should be a big help in making this expansion.
Morningstar has a price/forward earnings ratio on SNX at 8.4, which is cheap. The PEG ratio on present earnings is 0.7, again a very modest valuation on this growing company.
Helen of Troy (HELE)
Helen of Troy (NASDAQ:HELE) is down about 28% from its 52-week high, along with the general market pullback, and is one of the best stocks to buy for participating in a market recovery. HELE operates in growth areas of the economy, which might mitigate further downward pressure from a market decline.
HELE sells consumer products to customers throughout the world, including the U.S., Canada, and the Middle East. The wide range of products include home and outdoor items, health and beauty, and general wellness items. The beauty items are sold directly to consumers, as well as to retailers and wholesalers. McKinsey & Company estimates that the $1.5 trillion Wellness market will grow 5%-10% per year.
Zacks Investment Research estimates HELE will earn $12.89 this year versus $12.36 last year; Zacks sees HELE growing about 8% a year over the next 3–5 years and has a forward P/E ratio of 13.9, which is reasonable, and a PEG ratio of 1.74, which is high. Considering all that, taking a dollar cost averaging approach in establishing a position makes sense.
Option Care Health (OPCH)
Another company in the growing health industry is Option Care Health (NASDAQ:OPCH). OPCH is a major provider of in-home or alternate site infusion patient services, and operates throughout the U.S. Its offerings include services to treat heart failures, nutrition services and support activities for conditions such as cancer, Crohn’s disease, arthritis and other chronic conditions.
According to Yahoo.com, last year the company made 77 cents per share; the average analyst estimate for this year is 90 cents per share; next year’s per share estimate is $1.13.
At a market price of $29.07, OPCH is selling at a price/earnings multiple of 25.8 times year 2023 earnings; its PEG ratio is 1.36, which is a reasonable ratio, especially for a growth stock in a growth industry. This makes OPCH among the best stocks to buy, especially in this difficult, turbulent market.
Science Applications International (SAIC)
Science Applications International (NYSE:SAIC) was named the number-one provider of IT (information technology) services to the U.S. government in infrastructure implementation and managed services, as measured by revenue, BusinessWire.com reported on May 19.
SAIC offers a wide range of services, mostly in the U.S. The company provides engineering services, technology integration, IT modernization and many other IT services. Barron’s.com expects that SAIC will report Q1 2023 earnings in September; the average earnings analyst projection for fiscal year 2023 is $6.99 per share; for fiscal year 2024 the projection is $7.57.
At its present price of $85.26, the stock is selling at 11.3 times 2023 earnings. This is a reasonable multiple, making SAIC one of the best stocks to buy.
Barrons.com also reports that currently five reporting analysts have a buy on the stock, five have a hold, and one analyst says sell. The average price target on SAIC from analysts is $100.67.
Another tech company that ranks as among the best stocks to buy is Avnet (NASDAQ:AVT). Among Avnet’s activities are selling semiconductor products. Included in these products are electromechanical devices and other components. AVT also develops supply chain solutions and support to electronic component manufacturers and original equipment manufacturers (OEMs).
Even in this declining market, AVT has held up very well, only down 2.2% from its 52-week high. Zacks Research has a “strong buy” opinion on the company and notes that AVT has a PEG ratio of 0.18 compared with 0.53 for the industry, which is a low valuation.
As far as the forward price earnings multiple, Zacks reports that at 6.8, and estimates a growth rate of 37.21%, which makes the stock reasonably valued at its current market price.
TipRanks.com reports that AVT’s fourth quarter 2022 will be reported in August. The consensus earnings per share forecast is $1.98 vs $1.12 for the same quarter last year.
On the date of publication, Max Isaacman 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.