While going through a market downturn is incredibly painful, it’s important to keep your eyes on the prize because of the myriad opportunities for stock bargains. It might be a cliché to say this but it rings true; some of the greatest gains in wealth comes from patiently investing in viable companies and assets at a time when no one wants to touch the capital markets with a 20-foot pole.
Better yet – if you’ll excuse my expression – the upcoming downturn could be one of the biggest in history. At the end of May, I warned in an article for Barchart.com that Americans were heading into a possible recession with worryingly high consumer debt. Despite the avalanche of stimulus programs, Americans still have an outstanding credit card balance of $841 million. That means several folks are not in a position to acquire stock bargains.
As well, several traders – particularly young and novice ones – took all-or-nothing wagers on some of the most speculative asset classes. Now, when good companies are on discount, they don’t have the funds to leverage. Hopefully, that’s not you as there are plenty of stock bargains to consider.
|DAL||Delta Air Lines, Inc.||$30.26|
|PYPL||PayPal Holdings, Inc.||$72.90|
|FVRR||Fiverr International Ltd.||$33.28|
|BUD||Anheuser-Busch InBev SA/NV||$51.69|
|CSV||Carriage Services, Inc.||$35.64|
Stock Bargains: Delta Air Lines (DAL)
Admittedly, I’m nervous about leading off with Delta Air Lines (NYSE:DAL) as one of the stock bargains to put on your radar. As you know, the coronavirus pandemic utterly devastated the airline industry and it’s only until recently that the sector is rising from the rubble. Still, it will take many, many years for companies like Delta to recover. So, why bother with DAL?
Primarily, the Biden administration lifted requirements that international travelers test negative for Covid-19 within a day before boarding a flight to the U.S. This measure should help remove logistical and psychological hurdles for those planning vacations abroad. In addition, the looser standards should encourage global visitors to make a trip to the U.S., thus holistically benefiting DAL.
Second, despite the ravages of soaring inflation, travel demand has been surprisingly robust. It’s possible that as administrative hurdles are removed, more people will consider flying internationally, which again bodes well for Delta.
A mid-tier gold mining firm, Iamgold (NYSE:IAG) should be flying higher along with its peers. After all, the underlying asset historically played the role of safe haven. With plenty of fear going around about an inflation-related recession, IAG should be a natural contender for stocks to buy. However, IAG is down double digits on a year-to-date basis.
Still, this volatility presents IAG as one of the stock bargains to consider. One of the reasons for the red ink is investor fears about cost increases associated with a gold project near Ontario, Canada that’s currently under construction. Plus, geopolitical rumblings have people confused about which direction to aim their portfolio at.
Despite the troubles, IAG remains intriguing because of the inflation argument. Remember, even if the Federal Reserve shrinks the size of its balance sheet, the velocity of money stock will likely remain alarmingly low. Therefore, many analysts expect that the Fed cannot tighten the monetary spigot as previously imagined.
One of the most powerful names in the financial technology (fintech) space, payment-processing specialist PayPal (NASDAQ:PYPL) was a clear beneficiary of the post-Covid boom. However, that narrative started to come under serious fire in early October of last year. Since then, it’s been an ugly drop for the company. Indeed, PYPL is down over 60% in 2022.
While banking on PayPal is somewhat akin to catching a falling knife, it might be worth it for patient speculators. One of the biggest problems for PayPal is the rise of competing platforms. With inflation taking its toll, the fintech industry could be vulnerable to a race to the bottom.
Certainly, PYPL isn’t one of the stock bargains to throw everything into it. However, the PayPal brand is among the most powerful in the world. With a fleshed-out business model and strong user support, this reputation can go a long way, particularly for folks in the gig economy.
Stock Bargains: Fiverr (FVRR)
Because of the paradigm-shifting trends in the workplace that Covid-19 caused, employers had to contend with a new reality: worker bees – particularly the talented and skilled ones – weren’t going to accept any job. Empowered with telecommuting privileges along with checks from Uncle Sam, it was companies competing for the services of prospective employees.
Now, the table appears to be turning once again. With layoffs increasing in frequency as economic troubles mount, Fiverr (NYSE:FVRR) – an online marketplace for freelancers – could be a surprising idea among stock bargains. Basically, as businesses look to shed overhead costs, they may swing the axe at their least-value-creating employees. However, work still needs to get done, which is where independent contractors come into the frame.
In addition, Fiverr might enjoy a strong pool of talent. More than likely, several workers will clash with their employers about returning to the office. In that respect, the gig economy could burgeon, auguring well for FVRR stock.
Swinging over into the cynical realm of stock bargains to consider, Anheuser-Busch (NYSE:BUD) has a legitimate reason to be on any list of equities to speculate on, just to be clear. With Bud Light under its belt, Anheuser-Busch owns America’s top-selling beer. I didn’t say it was the best-tasting beer, just the best-selling.
However, if we do enter an economic downturn, investors will likely consider alcohol-related companies. Although it’s a heavily debated point, some research suggests that recession fuels risky drinking habits for both the jobless and the employed.
Even if you don’t invest with a cynical mindset, here’s the thing: we all need something to help take the edge off. Therefore, it’s perfectly reasonable for consenting adults to knock down a few during rough times.
On a technical analysis perspective, it appears that over the trailing year, the worst of the volatility has been baked into the BUD stock price. Therefore, Anheuser-Busch could be appealing for the gambling types.
Carriage Services (CSV)
I’m probably going to get some hate mail for this although I really shouldn’t because death and taxes represent the two guarantees of life. Carriage Services (NYSE:CSV), as you might guess from its euphemistically titled corporate name, deals with the former. As one of the biggest names in the death care industry, CSV is relevant, particularly because of the baby boomer generation.
However, let me point out an ugly reality: recessions, let alone depressions, aren’t just downers because of what they do to stocks but also what they do to people. A body of research indicates that mortality rates rise during periods of prolonged economic hardships. We can get into the reasons why but ultimately, the point is that the dearly departed end up somewhere.
Presently, CSV happens to be one of the stock bargains, especially compared to some of its rivals in death care. While it’s a tricky subject, if you have the stomach for it, CSV is fundamentally intriguing.
Stock Bargains: Volta (VLTA)
Easily one of the riskiest stock bargains to consider, Volta (NYSE:VLTA) as I’m writing this has dropped over 70% YTD. Therefore, I fully admit that VLTA is an attempt at catching a falling knife. Further, I’m not even going to bother saying that you won’t get stabbed. It’s quite possible you will.
Still, what really intrigues me is Volta’s core business. Billed as an infrastructure play for the electric vehicle sector, Volta commands an impressively large EV-charging network which is compatible (per my understanding) with a majority of electric-powered cars. So, if the transition to electrification materializes with gusto, VLTA could benefit.
But that’s not all. Volta features a unique advertising-based charging network, meaning that drivers are able to “refuel” for free in most cases. In exchange, drivers and other passersby are treated to several rounds of commercials and other advertising content. It’s an intriguing idea, one that might be worth it with some loose pocket change.
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.