Despite the fear and concern that bear markets create, smart investors understand they are excellent buying opportunities. We don’t know when they’ll hit, how far they’ll fall or how long they will last, but decades of data show the memory of every previous bear market was wiped clean by a bull market. The dramatic financial market collapse of 2008 soon turned into a massive run higher that lasted over a decade. It was the longest bull market in history, making it clear that bear markets can offer opportunities for savvy investors to identify and invest in no-brainer stocks if they show some patience.
The best thing about the buying opportunities on these downswings is you don’t need much cash to make a fortune. The stock market is such a perfect money-making machine that virtually any extra cash you have — even as little as $100 — is enough to deploy immediately. With the advent of fractional shares, even a stock priced above what you have available means you can still buy in with ease.
So long as you don’t need the money to pay bills or for emergencies, then you can put your $100 to work right away on these three no-brainer stocks to buy now.
Advanced Micro Devices (AMD)
Chipmaker Advanced Micro Devices (NASDAQ:AMD) is spearheading the drive forward in the artificial intelligence (AI) arms race. Rival Nvidia (NASDAQ:NVDA) may hold the lead, but AMD is quickly closing the gap. Its MI300 accelerators are expected to be a potent force in the battle for supremacy when they launch on December 6.
The accelerators should further fortify AMD’s position in the data center space because they will create new computing capabilities ideal for large generative AI models. They promise to unify AMD’s CPUs and GPUs on a single processor by sharing memory and providing unparalleled efficiency. The chips now have management expecting data center revenue will exceed $2 billion for all of 2024.
AMD is also working with Microsoft (NASDAQ:MSFT) on the next iteration of Windows that will feature AMD’s on-chip AI Engine. It promises to be the greatest advance in the Windows user experience in more than 20 years.
AMD’s stock is also a better buy than Nvidia’s, which trades at 25 times sales. AMD, on the other hand, goes for less than 9 making it the more attractive option. AI is changing the landscape and AMD has a long runway ahead to take the lead.
DaVita (DVA)
Priced just under $100, dialysis center leader DaVita (NYSE:DVA) is the next stock to consider buying with your C-note. It serves around 200,000 patients a year and has a 36% share of the market. That puts it just behind Fresenius Medical Care (NYSE:FMS) with a 38% share.
The dialysis services provider was hit hard by the Covid-19 pandemic, which limited visitations, spurred excess mortality and created labor problems. Its business is also heavily indebted, carrying $8.3 billion in long-term debt and $2.3 billion in long-term operating leases. Fresenius is similarly swimming in debt, though it has significantly more cash in the bank.
Yet DaVita surprised the market with a strong third-quarter earnings report. It beat analyst expectations on the top and bottom lines. It targets a low leverage ratio of 3.0 to 3.5x EBITDA over the long term. The dialysis center paused its stock buyback program last year to get into that range once more. Management says it will resume share repurchases this quarter.
Arguably the biggest threat DaVita and other dialysis centers face is Novo Nordisk‘s (NYSE:NVO) weight loss-in-a-pill treatments, Ozempic and Wegovy. The drug maker said clinical trials showed Ozempic slowed the progression of kidney disease in patients with chronic kidney disease and diabetes.
Yet dialysis patient revenue continues growing while expenses fall. That translates into increased profits. At 11 times earnings estimates, a fraction of revenues and just 6x free cash flow, DaVita trades at a significant discount. DVA is one of the top no-brainer stocks, and is just too cheap to pass up.
Axon Enterprise (AXON)
Stun gun maker Axon Enterprise (NASDAQ:AXON) completes our trio of no-brainer stocks with only $100 available to invest. It’s a stock to buy anytime it dips because the demand for less-than-lethal law enforcement weapons is growing.
Third-quarter revenue jumped 12% on the strength of its latest Taser 10 platform. It delivers 10 probes of contact to a suspect from a maximum range of 45 feet. That enhances officer safety while decreasing the likelihood of force escalation to lethal methods. The platform is also connected to Axon’s body and in-car cameras as well as its location data system and recordkeeping logs. Gross margins on the segment widened by 200 basis points (bp) to 62.5%. Its software and sensors segment saw even greater revenue growth of 54%. Margins for the business expanded to 72.4%, or by 270 bp.
There is just outsized demand for the industry leader’s products and services. Yet the stock was beaten down earlier this year though it is now up 40% from its lows. It does trade at a premium, but there are few competitors that can touch the breadth of its offerings. Axon deserves the markup it receives and the investor attention it’s getting.
On the date of publication, Rich Duprey did not hold (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.
