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3 Safe Stocks to Buy for ‘Chicken Little’ Investors

  • Here are three safe stocks to buy for ‘Chicken Little’ investors.
  • Goldman Sachs (GS): The leading investment bank goes from strength-to-strength in any type of market.
  • IBM (IBM): The blue-chip technology giant appears to finally be turning its business around.
  • General Motors (GM): The Detroit automaker’s big bet on electric vehicles is starting to pay off.
safe stocks to buy - 3 Safe Stocks to Buy for ‘Chicken Little’ Investors

Source: Shutterstock

Are you pessimistic about the stock market? Do you feel the bottom has yet to be reached and that equities will continue to fall? Are you anticipating an economic recession in 2023? If yes, then your doom and gloom attitude makes you a “Chicken Little” investor or someone who feels the sky is falling. But have no fear. There are safe and dependable stocks to buy for any investor, even those who tend to see the glass as half empty.

Investors who screw up the courage to buy in this bear market as stocks continue to fall will surely be rewarded once the grey clouds part and the sun shines again. Shares of some excellent and resilient companies are now available at deeply discounted prices. Here are three safe stocks to buy for Chicken Little investors.

Symbol Company Price
GS Goldman Sachs $339.02
IBM International Business Machines $138.28
GM General Motors $38.25

Goldman Sachs (GS)

In this photo illustration the Goldman Sachs Group (GS) logo displayed on a smartphone screen and a stock market graph in the background
Source: rafapress / Shutterstock.com

U.S. investment bank Goldman Sachs (NYSE:GS) recently released third-quarter earnings that beat Wall Street forecasts due to better-than-expected bond trading. The New York-based financial giant reported Q3 earnings per share of $8.25. In comparison, analysts expected $7.69 a share, according to Refinitiv data. Revenue at Goldman came in at $11.98 billion versus $11.41 billion, which was expected.

Goldman managed to buck the pessimism on Wall Street by ramping up its bond trading even as other areas of its business, notably its investment banking unit, which is focused on initial public offerings (IPOs) and mergers and acquisitions, declined sharply in July through September period. Specifically, bond trading generated $3.53 billion in revenue for Goldman Sachs, a 41% increase from a year earlier.

In addition, the strong bond trading results helped offset a 57% drop in investment banking revenue during the third quarter and a 14% decline in equity trading. The Q3 print was the latest example of how Goldman Sachs, arguably the world’s most influential investment bank, manages to go from strength to strength in any market – bull or bear.

GS stock is down 17% this year and trading at $339 per share. The stock is 23% below its 52-week high of $426.16. This provides a good entry point for investors who want exposure to a leading and reliable U.S. bank stock.

International Business Machines (IBM)

Photo of IBM (IBM) building as seen through the canopy of a tree. IBM logo is in large letters on side of building.
Source: shutterstock.com/LCV

Venerable blue-chip technology concern International Business Machines (NYSE:IBM) stock has long been a laggard. Over the past five years, IBM stock has declined 10% and now trades at just over $138 a share, slightly above the level it was in the late 1990s. However, there is good reason for optimism regarding Big Blue as the Armonk, New York-based company is finally turning its business around.

Case in point: IBM just issued better-than-expected third-quarter earnings, leading its stock to pop nearly 10% higher over the past trading week. The company reported earnings per share of $1.81 versus the $1.77, expected on Wall Street. Moreover, revenue in the period ended September 30 came in at $14.1 billion. In comparison, analysts expected $13.51 billion, according to Refinitiv data.

Looking ahead, IBM raised its revenue guidance for the year. Revenue from software sales totaled $5.81 billion in Q3, representing annual growth of 7.5%. This also exceeded the $5.54 billion forecast by analysts who cover the tech giant. In addition, consulting revenue amounted to $4.70 billion, which was up 5.5% and also above expectations.

Finally, IBM stock is down only 2% this year compared to a 20% decline in the benchmark S&P 500 index and a 30% decline in the technology-heavy Nasdaq exchange. Investors looking for an underappreciated tech company on the upswing should consider IBM as one of the safe stocks to buy.

General Motors (GM)

Image of the new GM logo on a smartphone with cars in the background.
Source: Formatoriginal / Shutterstock.com

Like IBM, Detroit automaker General Motors (NYSE:GM) seems to be turning its fortunes around, and its massive investment in electric vehicles is finally bearing fruit. As with the other stocks on this list, GM just announced third-quarter earnings that trounced Wall Street forecasts.

The motor vehicle manufacturer reported earnings per share of $2.25 versus the $1.88, which analysts had anticipated. Revenue in the quarter slightly missed expectations, coming in at $41.89 billion versus a forecast of $42.22 billion. General Motors maintained its outlook for full-year net income of $9.6 billion to $11.2 billion and earnings of between $13 billion and $15 billion, or $6.50 to $7.50 per share.

In its earnings statement, GM said it expects to reach the midpoint of its earnings guidance for the year. The company continues to push ahead with its transition to electric vehicles, allocating $35 billion to electrify its fleet between now and 2025. GM stock is down 40% this year and trading at just over $38 a share. Buy the dip!

On the date of publication, Joel Baglole held a long position in GM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


Article printed from InvestorPlace Media, https://investorplace.com/2022/10/3-safe-stocks-to-buy-for-chicken-little-investors/.

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