4 Stocks to Buy Before the Bull Market Returns

  • There are multiple indications that a bull market is on the way. As a result, there are many good stocks for investors to buy.
  • PayPal (PYPL) will benefit from strong consumer spending and a higher valuation as the economy recovers.
  • Roku (ROKU) should get a lift from streaming's market share increases and better-than-expected demand for digital ads.
  • BlackBerry's (BB) QNX operating system is growing rapidly, and there's a great deal of demand for its auto app store.
  • Amazon (AMZN) should be boosted by the resurgence of e-commerce.
stocks to buy - 4 Stocks to Buy Before the Bull Market Returns

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Amid increased signs that a powerful bull market could be on the way for the U.S. stock market, there are many good, beaten-down stocks to buy for long-term investors.

A significant amount of economic data is indicating that a new bull market could be closer than many believe. For example, durable-goods orders for May accelerated significantly. Further, inflation expectations among consumers dropped this month, according to the University of Michigan, while the increase of the core consumer price index dropped slightly in May, compared with April. Further, oil prices have dropped in recent weeks.

Of course, reduced inflation will enable the Fed to raise rates less quickly, causing the economy’s growth to be stronger than if the central bank has to tighten faster to combat inflation.

Moreover, multiple experts are saying recently that we could be on the verge of a bull market. One such expert, Forbes contributor John S. Tobey, wrote in his June 24 column that “indicators of a coming bull market launch are everywhere – both traditional signals and unique developments.” Additionally, CNBC’s Jim Cramer recently contended “that there are several things that need to happen for the market to have a bull market within a bear market situation.” I believe that all six items on his list have a greater than 50% chance of occurring.

These four names are stocks to buy now.

Ticker Company Current Price
PYPL PayPal Holdings, Inc. $71.82
ROKU Roku, Inc. $89.09
BB BlackBerry Limited $5.74
AMZN Amazon.com, Inc. $107.40

Stocks to Buy: PayPal Holdings (PYPL)

PayPal logo and front of headquarters
Source: Michael Vi / Shutterstock.com

Like all the companies in the payment space, PayPal (NASDAQ:PYPL) should benefit a great deal from the continued strength of consumer spending.

As evidence of that theory, take a look at what Visa’s (NYSE:V) CFO said on June 7. “In general, spending on credit has been strong. It’s been strong across income groups. It’s been strong on what you might call discretionary spend, right, especially travel, restaurants and entertainment,” executive Vasant Prabhu said.

Moreover, as worries about a recession dissipate and a bull market is launched, PayPal’s price-earnings multiple should climb a great deal, while analysts are likely to meaningfully raise their estimates for the company, fueling a major rally by PYPL stock.

Roku (ROKU)

ROKU Stock Will Continue Benefitting From the TCL Partnership
Source: Michael Vi / Shutterstock.com

As InvestorPlace contributor Nicholas Chahine aptly explained in his June 22 column on Roku (NASDAQ:ROKU):

Not much has changed in the business outlook for Roku. The world is still transitioning right into {Roku’s} realm of operations. The streaming trend is only getting stronger, so ROKU stock should continue to have tailwinds for years.

Indeed, streaming’s share of overall TV viewing continues to climb, reaching a record 31.9% share of TV time in May.

A couple of things will change, however, for Roku once the Street gets over its fears of a ruinous recession and gargantuan interest rates. After that occurs, the multiple of Roku stock should jump, and many investors will become less fearful about buying its shares. Meanwhile, there have been rumors that Netflix (NASDAQ:NFLX) is interested in buying Roku. Given Netflix’s significant problems and Roku’s growing, tremendous reach and advertising power, I would not be at all surprised if Netflix does wind up acquiring Roku.

Additionally, easing supply chain pressures should result in more TVs with Roku’s operating system being sold. Meanwhile, Roku’s new deal with Walmart (NYSE:WMT), which enables viewers to buy products on Roku for the first time, looks poised to become very lucrative. Other retailers are likely to sign similar deals with Roku, creating a significant, new revenue stream for the tech company.

BlackBerry (BB)

A BlackBerry (BB) sign out front of a corporate office in Silicon Valley, California.
Source: Shutterstock

BlackBerry’s (NYSE: BB) Internet of Things business, which features its leading QNX operating system for vehicles, continues to regain momentum. Last quarter, the unit’s top line jumped 19% year-over-year to $51 million, and its gross margin came in at a very impressive 84%.Further, the unit’s backlog of royalties climbed 14% YOY to $560 million, while QNX is now installed in 215 million vehicles globally. Finally, the unit had 14 design wins last quarter.

Encouragingly, Blackberry has been unable to keep up with the demand for proof-of-concepts trials of its auto app store, which is known as Ivy. I continue to believe that Ivy will be a true game-changer for BlackBerry and BB stock.

And the company, which recently completed the first quarter of its fiscal 2023, is looking “to be approaching breakeven non-GAAP EPS and cashflow in FY24.” It’s also seeking “to generate positive non-GAAP EPS and cashflow beginning in FY25.”

Stocks to Buy: Amazon (AMZN)

An image of an Amazon logo on a building
Source: Jonathan Weiss / Shutterstock.com

Multiple Wall Street analysts have been upbeat on Amazon (NASDAQ:AMZN) in recent weeks. Renowned Wedbush analyst Dan Ives named Amazon as one of four companies that will benefit from resilient spending by companies on the transition to the cloud

Similarly, Morgan Stanley expects Amazon’s cloud business to remain strong during the economic downturn because less than 10% of the unit’s revenue comes from small companies.

Also bullish on AMZN stock was JPMorgan. Amazon remains a “best idea” for the firm, as JPMorgan expects the company’s sales growth to accelerate in the second half of the year. That idea is similar to my own thesis that the company will benefit from a rebound of the e-commerce sector once the pent-up demand for travel cools down somewhat. JPMorgan also expects Amazon to “gain share in underpenetrated categories, “and it kept a $200 price target and an “overweight” rating on the name.

Moreover, going forward, Amazon’s decision to carry out a stock split should continue to result in a higher number of retail investors buying the shares than in the past.

On the date of publication, Larry Ramer owned shares of BB stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.

 


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