The stocks to buy this week relate to major news items that occurred relatively recently. As well, they take into consideration prior price action. Therefore, I steered clear of obvious meme trades. While speculating on short squeezes or other contrarian events draws excitement, it tends to be very unpredictable.
Nevertheless, these companies merely represent ideas that could swing higher in the near term. The goal is more toward bringing compelling opportunities to the table with a reasonably long shelf life.
With that out of the way, here are seven stocks to buy this week.
Exxon Mobil (XOM)
Perhaps the most obvious idea for stocks to buy this week is Exxon Mobil (NYSE:XOM). That’s because on Friday, Aug. 19, Warren Buffett via his company Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), received regulatory approval to purchase up to 50% of oil firm Occidental Petroleum (NYSE:OXY).
CNBC noted that Berkshire dramatically increased its stake in Occidental. Naturally, OXY shot up just a hair under double-digit territory on Friday. On a year-to-date basis, the security is up 140%. However, chasing OXY might not be the wisest idea for stocks to buy this week.
And that brings us back to Exxon Mobil. The idea here is to ride Occidental’s coattails. While no major breaking news hit Exxon, the bigger takeaway is that the Oracle of Omaha sees upside in hydrocarbons.
Moreover, XOM presents a fairly valued (if not undervalued) investment. The company features robust strengths in the balance sheet and very solid profitability metrics. In contrast, Gurufocus.com considers OXY significantly overvalued.
Robert Half (RHI)
Based on recent developments, the inclusion of employment services agency Robert Half (NYSE:RHI) might appear strange. After all, the latest jobs report for July produced outstanding results. Indeed, the number of employment opportunities added to the economy exceeded expectations. However, not all is well.
Primarily, investors should note that the labor force participation rate for workers aged 25 to 54 years has been flat since March of this year. That’s an oddity if the labor force is holistically rebounding. More significantly, good jobs have begun fading into the background. Recently, I drew attention to seven technology firms forced to conduct layoffs.
In particular, tech-driven real-estate brokerage firm Compass (NYSE:COMP) draws major red flags. A few months ago, it announced that it will cut about 10% of its workforce. More recently, management stated that more layoffs will occur by October.
So yes, the jobs report stunned everyone. However, the prospects for good jobs present significant ambiguities. That’s why I’ll bet that RHI is one of the stocks to buy this week.
Specializing in insurance products for classic cars, Hagerty (NYSE:HGTY) broadly benefits from recent fundamental developments. Mainly, equities slipped on Friday because “St. Louis Federal Reserve President James Bullard indicated that the central bank would likely continue hiking rates in the near term,” per CNBC.
Naturally, higher rates equate to higher borrowing costs, reducing incentives for growth-oriented businesses. However, not all companies feel the same about higher rates. Specifically, insurance firms tend to have a direct correlation with rates. Basically, as rates go up, so too does the valuation of insurance companies.
However, that’s not necessarily the reason why I bring up HGTY as one of the stocks to buy this week. Rather, the underlying company caters to a wealthier clientele. In addition to insuring classic cars, it also covers boats, motorcycles and other rich people’s toys.
Not everyone will feel the impact of a potential recession at the same time. In a way, then, Hagerty provides some margin of safety.
Considering that Friday’s main talking point on Wall Street centered on the trajectory of the benchmark interest rate, it’s a good time to bring up KeyCorp (NYSE:KEY). KeyCorp’s primary subsidiary is KeyBank, a regional bank headquartered in Cleveland, Ohio. This fact may be significant for two reasons.
First, as a general discussion, regional banks may present a safer option than big banks like JPMorgan Chase (NYSE:JPM). As the title suggests, regional firms tend to focus on regional concerns. Therefore, these localized enterprises theoretically feature insulation from international headwinds that could impact a JPMorgan.
Second, multiple reports indicate that millennials have migrated to the Midwest. Many have even relocated to smaller Midwestern cities. Naturally, this dynamic boosts KeyCorp and its main subsidiary due to its Midwestern focus and roots.
As well, KEY may be one of the stocks to buy this week for interest-rate insulation. Essentially, as rates rise, this movement translates to higher profitability for KeyCorp. Still, be aware that aggressively accelerating rates work in the opposite direction.
Despite the July jobs report presenting an optimistic picture of the economy, it might not be capturing important nuances. As mentioned above, tech layoffs have accelerated this year. The problem with this dynamic is that tech jobs typically pay higher-than-average salaries. Therefore, the nominal labor market report may be hiding significant pain.
Cynically, this matter segues into a discussion for LendingClub (NYSE:LC). A financial services firm, LendingClub specializes in online personal loans up to $40,000. As the multi-decade highs in inflation crimp household spending (and savings), many folks may turn to the fintech company. Basically, you got to do what you can to make ends meet.
Investors must appreciate the widescale suffering that has materialized. In 2021, the purchasing power of the dollar declined 6%. Just in the first half of this year, the erosion measured 5.3%. Now, the Fed committed to an aggressively hawkish monetary policy to provide course correction. But that action would then pressure economic health overall.
Therefore, LC may be one of the stocks to buy this week, just out of sheer necessity.
Lockheed Martin (LMT)
Again diving into the cynical nature of stocks to buy this week, investors should tune into Lockheed Martin (NYSE:LMT). As I write this, CNBC has been providing breaking news about Russia’s control of Ukraine’s Zaporizhzhia nuclear power plant. Europe’s largest nuclear facility, any incident there could spell catastrophe for the region.
Additionally, House Speaker Nancy Pelosi’s visit to Taiwan sparked anger in China. The issue here also presents great risks.
About the only good news in this whole mess comes down to the performance of certain military contractors. Primarily, Lockheed has bolstered the Ukrainian resistance, in large part to the company’s High Mobility Artillery Rocket System (HIMARS).
Admittedly, LMT represents a controversial name among stocks to buy this week. However, it’s still very much relevant.
For the most speculative name on this list of stocks to buy this week, contrarian investors may consider EVgo (NASDAQ:EVGO). Billed as America’s largest public electric vehicle fast charging network, EVgo brings necessary infrastructure to the table. Fundamentally, EVGO benefits from the fact that not everyone has access to personal charging mechanisms.
While 63% of all housing units feature a garage or carport, this figure leaves many millions of units which don’t. Therefore, EVgo fills an opportunity gap. However, the market hasn’t been that kind to EVGO stock, with shares moving sideways since its public market debut.
Of course, part of the problem is that Tesla (NASDAQ:TSLA) plans to open its Supercharger network to all EV owners. Further, EVs themselves have gotten very expensive, thus pricing out many consumers.
However, JPMorgan mentioned that EVGO represented one of the securities to buy as a derivative play on the EV rollout. With shares starting to come back down to the price when JPM mentioned its bullishness, EVGO certainly provides intrigue.
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.