The volatility that has rocked markets since the beginning of July might not be over just yet. August has proven to be extremely rocky. The unwinding of the carry trade in Japan, coupled with fears of a potential U.S. recession, have sent stocks plunging. And while many stocks have clawed back their losses, a lot of large-cap tech stocks are still down more than 10% in the past month.
The benchmark S&P 500 index has declined 2% since the start of July, and the tech-heavy Nasdaq Composite index had fallen 9% but recovered and is now down 3%. It continues to flirt with a correction, defined as a 10% decline from recent highs. Analysts at JPMorgan Chase (NYSE:JPM) just increased the odds of a recession in the U.S. this year to 35%, and experienced and closely followed investors such as Warren Buffett continue to sell stocks.
It all adds up to an extremely uncertain environment. So what can investors do to protect themselves? Where’s a good port in this market storm? How to shield one’s portfolio from the current volatility? Here are three stable blue-chip stocks to buy for the market storm.
Sweetgreen (SG)
Sweetgreen (NYSE:SG) just reported strong second quarter results – so strong that they sent the stock of the restaurant chain that specializes in salads up 33% in one trading day. SG stock skyrocketed after the company reported revenue of $184.6 million, which was up 21% from a year earlier and ahead of Wall Street forecasts of $180.8 million. Sweetgreen, which held its initial public offering in November 2021, opened four new restaurants during the quarter.
Management said that same-store sales rose 9% during Q2 of this year despite a difficult operating environment that has seen consumers pull back their discretionary spending. The company, which is still not profitable, posted a net loss of $14.5 million. However, that was an improvement from a loss of $27.3 million registered a year earlier. Sweetgreen has the added benefit of being a small-cap stock, which is popular with investors right now. Its market capitalization is currently at $3.93 billion.
With the post-earnings jump, Sweetgreen stock is up an impressive 145% over the last 12 months, making it a blue-chip stock to buy.
Novo Nordisk (NVO)
Pharmaceutical company Novo Nordisk (NYSE:NVO), also among the blue-chip stocks to buy, looks like a good bet after delivering a solid Q2 print that showed sales of its weight-loss drug soaring. Novo Nordisk, which is based in Denmark, said it had a net profit of $2.93 billion in this year’s second quarter. That result was a little below a profit of $3.06 billion expected among analysts. However, sales of the company’s popular weight loss drug Wegovy increased 55% year-over-year in Q2 to $1.71 billion.
As a result, Novo Nordisk raised its sales forecast for this year, saying it anticipates 22% to 28% revenue growth for all of 2024. That’s up from a prior forecast of 19% to 27% growth. Wegovy was recently approved for use in China, opening a potentially huge new market for the medication in the nation of 1.4 billion people. More recently, regulators in the European Union approved Wegovy as a treatment for heart disease in overweight and obese adults, giving the medications sales another potential boost.
On their Q2 earnings call, management said they remain confident in their ability to ramp up production of the Wegovy weight-loss drug and “sustain competitiveness long term.” NVO stock has risen 49% in the past 12 months.
Procter & Gamble (PG)
For a really stable blue-chip stock, consider consumer goods company Procter & Gamble (NYSE:PG). The company makes essential products such as Tide laundry detergent and Gillette razor blades, and its sales and stock price tend to hold up in any market environment. Most recently, Procter & Gamble reported mixed financial results for this year’s second quarter. The company announced EPS of $1.40, which beat Wall Street estimates of $1.37.
However, revenue totaled $20.53 billion, which slightly missed the $20.74 billion that was forecast among analysts. That said, Procter & Gamble’s sales volumes increased for the first time in more than two years during the quarter. Price increases across its portfolio of brands that also includes Charmin toilet paper led to declining sales volumes as consumers bought fewer of the company’s products and sought out generic alternatives. That trend of declining sales volumes now looks to have reversed.
PG stock, one of the top blue-chip stocks to buy, has increased 10% on the year.
On the date of publication, Joel Baglole 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
