While few enjoy the pain of red ink in the markets when volatility strikes, forward-thinking investors can use the current circumstances to load up on intriguing stocks to buy. To be sure, fear has once again crept into the equities sector. Primarily, Federal Reserve chair Jerome Powell sounded the alarm on inflation. During his policy speech at the annual economic symposium at Jackson Hole, Wyoming, Powell reiterated his hawkish intentions.
Adding to the woes for bullish investors is that other international central banks stand poised to deliver similar directives. For instance, record inflation in the Eurozone recently pushed the 10-year German bund yield to a two-month high. Therefore, this dynamic increases the odds the European Central Bank will tighten its monetary policy aggressively. Ordinally, that wouldn’t bode well for stocks to buy.
However, certain companies may perform better than others during this drought. Whether that’s because they’re particularly relevant or are structured for resilience during downcycles, investors should consider the below sell-off stocks to buy.
Chevron (NYSE:CVX) throughout most of this year has performed remarkably well. Currently, shares are up almost 30% on a year-to-date basis. However, the Fed chair’s remarks have not helped matters for CVX. In the trailing five days as of Aug. 31, the stock slipped 3.5%.
While a hawkish monetary policy theoretically should reduce inflation, it might also wind down the economy. At a time when layoffs in the technology sector are accelerating, a deliberately slowed economy might not produce helpful results. Therefore, many investors decided to head for the sidelines. Though this action is understandable, it also presents an opportunity for contrarians.
Essentially, with Ukraine launching a counteroffensive to take back certain occupied territories, neither side appears ready to negotiate. In turn, this circumstance bodes poorly for European countries which depend on Russian gas supplies.
Put another way, sharply reduced inventory ahead of raging demand (to stock up for winter) bodes cynically well for CVX.
While not the most exciting name among stocks to buy, Coca-Cola (NYSE:KO) draws intrigue during this hour. Historically, analysts considered the soft drink giant recession resistant. Mainly, the company benefits from easily accessible products. Combined with a powerful brand leading to intense volume, Coca-Cola’s financials tend to be resilient against pressure.
Fast-forward several years later, and several market experts state similar arguments. One big believer in KO stock is Jim Cramer. In addition to citing the company’s recession-resistant nature, Cramer also mentioned factors such as cost controls, expansion into different product lines and the eventual full reopening of China.
Beyond all these solid talking points, a can of Coke presents a cheap pick-me-up. During a possible recessionary cycle, consumers might not want to pay top dollar at a fancy coffeehouse. Instead, they might get their caffeine fix from Coca-Cola, making KO one of the sell-off stocks to buy.
Mentioning Toyota (NYSE:TM) might seem a bit reckless when it comes to stocks to buy amid the recent sell-off. Sure, TM is down 20% YTD. However, the underlying company obviously specializes in big-ticket items. Now, if consumers are pulling back on smaller discretionary items like computers, then buying a car is over the top.
However, auto purchases don’t always represent discretionary decisions. Unless you live in a part of the country where public transportation networks operate robustly, you must have a car. Typically, it’s the car that decides when it needs to be replaced, not the owner.
Here’s where circumstances take an intriguing turn. With vehicles on U.S. roadways hitting a record-high average age of 12.2 years, plenty of rides will need replacing. Moving ahead, Toyota’s reputation of quality products should help it distinguish itself from the competition.
Not only that, the company is versatile. For instance, Toyota plans to invest billions in electric vehicle batteries. So, don’t ignore TM when deciphering stocks to buy on the recent sell-off.
Five Below (FIVE)
Discount retailer Five Below (NASDAQ:FIVE) appears to be an ideal play. With a possible recession on the horizon, Five Below’s quality products at discount prices should appeal to stretched consumers. Unfortunately, the numbers didn’t quite pan out that way – at least, not yet.
Heading into the company’s second-quarter disclosure, analysts anticipated Five Below would post earnings per share of 78 cents. However, the retailer could only muster an EPS of 74 cents per share. This tally also fell well below the year-ago quarter’s result of $1.15 per share.
On the other hand, revenue increased 3.5% to $668.9 million. However, this figure also missed analysts’ expectations set at $679.5 million. Management admitted customers impacted by inflation resulted in lower-than-expected sales.
While Five Below didn’t deliver the most uplifting news, it may perform better down the line. With the holiday season soon approaching, consumers won’t abandon the gift-giving festivities. Instead, they’ll look to trade down, which augurs well for FIVE stock.
Hain Celestial (HAIN)
Moving over to the riskier names among stocks to buy on the latest sell-off, Hain Celestial (NASDAQ:HAIN) might initially intrigue investors. As a food company and a provider of botanically based personal care products, Hain commands a secular demand profile. No matter what happens in the economy, people have to eat.
Unfortunately, the market has not been kind to HAIN stock. Since the start of this year, shares have slipped 53%, which is staggering. However, the pain isn’t entirely unwarranted. For instance, in its fourth-quarter 2022 report, it posted a small revenue increase of 1.4% year-over-year. However, net income fell to $3 million from $40 million in Q4 2021.
Despite the challenges facing Hain, the company might enjoy a relevant narrative. Throughout the roughly two-year period of pandemic-related lockdowns and mitigation measures, Americans gained weight. To combat the expansion of the waistline, folks must implement their own measures. Hain’s focus on quality food products and beverages might help.
Wynn Resorts (WYNN)
On paper, Wynn Resorts (NASDAQ:WYNN) doesn’t appear to be a viable investment. Admittedly, outside factors suggest pessimism for the casino operator. For example, U.S. airliners saw a large increase in complaints in the first half of this year. Coupled with flight cancellations and rising inflation crimping demand, many travel-related companies have struggled.
Along with growing evidence the erosion of the dollar’s purchasing power is finally impacting consumer sentiment, heading out to Las Vegas doesn’t seem wise. The rest of the equities sector seems to share this opinion. Since the January opener, WYNN shed 31% of market value.
Still, for the forward-thinking speculator, WYNN may present an enticing opportunity. Because of the severe restrictions that Macau – a special administrative zone of China – imposed regarding coronavirus protocols, Wynn’s sales in the region suffered massive disruption.
However, once this headwind fades, WYNN could be back on a winning streak. Essentially, Macau patrons go to Wynn properties primarily to gamble as opposed to eating or attending events. This dynamic bodes well for business, meaning WYNN is one of the best stocks to buy for the patient investor.
Paladin Energy (PALAF)
As a sub-dollar security, I want to be very clear up front. You do not want to engage Paladin Energy (OTCMKTS:PALAF) with money you can’t afford to lose. In addition, PALAF being traded over the counter may create unfavorable circumstances, such as wide bid-ask spreads. You’ve been warned.
Now, taking the above caveats into consideration, the main reason to consider Paladin as one of the stocks to buy is relevance — scientific relevance, to be exact. As a uranium miner and exploration firm, Paladin might not immediately appeal to investors. After all, seemingly everyone focuses on green and sustainable energy solutions like wind and solar these days.
However, the reality is nothing beats the energy density of nuclear fuel. One uranium pellet, for example, features the equivalent energy potential of 149 gallons of oil. Moreover, nuclear energy represents the most reliable power source by a wide margin.
Given geopolitical pressures have now weighed on global energy supplies, nuclear power has never been more relevant.
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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.