The stock market is flying high in November, propelled by economic data showing that inflation and the U.S. economy are slowing. Another catalyst lies in expectations that the U.S. Federal Reserve is likely finished raising interest rates.
After declining for three consecutive months, the benchmark S&P 500 index has risen 7% so far in November as a year-end Santa Claus rally appears to be taking hold. Investors welcome this news as stocks of many well-known companies climbing higher.
Yet despite the current euphoria, traders should keep an eye out for any market downturns that provide opportunities. Likely in the early innings of a prolonged rally, investors should continue loading up on top-tier stocks before the current bull run turns into a stampede. Let’s delve into three must-buy stocks on every market dip.
Target (TGT)
It might be a while until retailer Target (NYSE:TGT) stock dips again. TGT stock is up 17% as of November 15 following the company’s Q3 financial results that trounced Wall Street forecasts.
Target reported Q3 earnings per share (EPS) of $2.10 versus $1.48 analysts’ expectation. Revenue presented at $25.40 billion compared to the forecast $25.24 billion. TGT said its results got a boost from sales of food and beauty, which offset weaker spending by consumers overall.
Also, the company reported a 14% decline in inventories, as well as lower freight, supply-chain, and delivery expenses. Gross margins rose to 27.4% from 24.7% a year earlier. Additionally, investors like Target’s optimism about its outlook for holiday sales this year. They forecast earnings of $1.90 to $2.60 per share in the current fourth quarter, ahead of the $2.22 expected on Wall Street. To jolt sales during the holidays, Target is offering exclusive merchandise, including thousands of items under $25 each.
While TGT stock is surging following the company’s Q3 print, the share price remains down 15% on the year, presenting a buy-the-dip opportunity for investors.
Apple (AAPL)
Shares of consumer electronics giant Apple (NASDAQ:AAPL) are proving impressive amid the company’s Q3 report. AAPL stock has gained 13% since the end of October and is up 51% on the year.
However, because of peaks and valleys along the way, investors should watch for any further pullbacks to grab shares of Apple. While sales of iPhone and MacBook laptops have slowed, growth in its services business, such as Apple TV, is making up for it.
But even on the hardware side of its business, Apple isn’t taking the sales slowdown lightly. Early indicators show sales of its newest iPhone 15 are brisk. And the company recently announced that new microchips for its personal computers (PCs) and a cheaper MacBook Pro laptop will attract consumers and spur sales. The chips provide faster speeds and have the power needed to develop artificial intelligence (AI) applications.
Long-term, Apple remains a proven winner for investors. Over the last five years, AAPL stock has increased a whopping 290%.
Johnson & Johnson (JNJ)
Healthcare stocks look poised for a comeback. Johnson & Johnson (NYSE:JNJ) could be a great way to play the recovery. The company’s earnings are improving with its recent spin-off. The consumer health unit is a new publicly-traded company called Kenvue (NYSE:KVUE).
Also, driven by strong sales of medical devices and pharma products, JNJ posted Q3 EPS of $2.66, ahead of the $2.52 Wall Street expectation.
Further, July through September revenue rang in at $21.35 billion compared to the forecast $21.04 billion. Also, the drug maker is raising full-year guidance, since it now expects 2023 sales of $83.6 billion to $84 billion, up from $83.2 billion to $84 billion previously. Amidst lawsuit concerns claiming that JNJ’s talc-based products caused cancer which led to several deaths, those products now fall under Kenvue. This takes pressure off JNJ stock.
With the share price of Johnson & Johnson down 16% on the year, grab the opportunity to buy the stock now. But investors should also look for any further weakness to add to their position.
On the date of publication, Joel Baglole held a long position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
