Adding $100 to these 7 stocks would be a stroke of genius right now

It’s been a long time since Wall Street and ordinary investors have faced such a difficult year. Centered Growth Nasdaq Compound, which was largely responsible for pushing the market to new highs, lost about a third of its value. Meanwhile, the widely followed S&P500 produced its worst first-half performance in more than half a century.

While it’s never fun to see unrealized short-term losses pile up, history has also shown that bear market declines are the perfect opportunity for long-term investors to grow their money.

Image source: Getty Images.

With most online brokers waiving commission fees and minimum deposit requirements, you don’t need a mountain of money to take advantage of major market declines. If you have $100 in cash that’s ready to invest right now, which won’t be needed to cover bills or emergencies, then putting that cash to work in the following seven actions would be a stroke of genius.

1.Walt Disney

The first exceptionally smart buy as the stock market plunges is the “House of Mouse” – waltz disney (SAY -1.81%). While bringing joy to families, Disney shares have hurt its shareholders, down about 45% since hitting an all-time high.

While things may seem a little “goofy” at the moment, Walt Disney brings a competitive edge to the table that can’t be matched by other content providers. Namely, it can easily cross generational gaps to connect with users. Whether it’s Disney’s huge library of content that lets grandparents and grandkids find common ground, or the company’s theme parks, which bring friends and families together daily , the Walt Disney brand is a beast that continues to rise in value and fetch incredible prizes. Powerful.

Walt Disney’s streaming platform, Disney+, is also poised to be a serious long-term growth engine. As of July 2, 2022, Disney+ had 152.1 million subscribers. It took Disney less than three years to reach the total number of subscribers that took netflix more than a decade to amass.

2.AstraZeneca

The beauty of health stocks is that they are very defensive. Since we cannot choose when we get sick or what illnesses we develop, there is always a demand for prescription drugs, medical devices and health services. This is what makes the pharmaceutical stock Astra Zeneca (AZN 0.90%) such a genius buy right now.

After more than a decade of operating seemingly in place, AstraZeneca has many areas of focus firing on all cylinders. For example, oncology sales grew 18% at constant currencies in the first half of 2022, largely driven by sustained double-digit sales growth of blockbuster drugs Tagrisso, Imfinzi and Lynparza. Cardiovascular (CV) therapies also excelled, with next-generation type 2 diabetes drug Farxiga increasing year-over-year sales by 63% at constant currencies.

AstraZeneca has also benefited enormously from its acquisition of rare disease drug maker Alexion Pharmaceuticals. Although developing drugs for a small group of patients can be risky, the reward for success tends to be a high list price with little or no pushback from insurers, and minimal or no competition.

WTI Crude Oil Spot Price Chart

A permanently higher oil price could encourage more drilling. WTI Crude Oil Spot Price given by Y-Charts.

3. Enterprise Product Partners

Although the memory of demand for oil and natural gas falling off a cliff during the early stages of the COVID-19 pandemic is still fresh in the minds of investors, the midstream oil and gas company Enterprise Product Partners (EPD 2.68%) can put those concerns to bed.

Intermediary companies like Enterprise Products Partners are actually energy intermediaries. They transport, store and occasionally process crude oil and natural gas. What is important is that the intermediary suppliers rely on fixed price and volume-based contracts with the drilling companies. This leads to highly predictable operating cash flows and makes oil and natural gas spot price volatility a moot point. Being able to accurately forecast its cash flow is what allows enterprise product partners to pay a hefty 8% return.

Additionally, disruptions in the global energy supply chain are likely to keep oil and gas prices high for some time. Russia’s invasion of Ukraine, coupled with reduced capital investment by energy majors during the pandemic, will make it difficult to increase supply anytime soon. Rising energy commodity prices should encourage drillers to eventually increase their long-term spending plans.

A person smiling while holding a cup of coffee and looking at an open laptop on the table in front of them.

Image source: Getty Images.

4. Fiverr International

Another awesome way to make $100 work right now would be to buy stocks from the online services market. Fiver International (FVRR -1.68%). Even though the job market is likely to weaken as the Federal Reserve raises interest rates and makes borrowing more expensive, Fiverr’s two competitive advantages make it an obvious buy.

First, Fiverr’s freelance-focused platform presents jobs as bundles. Comparatively, most freelancers on competing marketplaces charge for their services on an hourly basis. Fiverr’s method provides superior price transparency for buyers, which has encouraged increasingly higher spending per buyer in Fiverr’s marketplace even as the US economy has weakened.

The second (and arguably most impressive) competitive advantage can be seen in Fiverr’s engagement rate. The “acceptance rate” describes the percentage of each deal traded in its market that it can keep. While most of Fiverr’s competitors have low to mid-teen participation rates, Fiverr’s participation rate has steadily increased to almost 30% by the end of June.

Table of Effective Federal Funds Rates

Aggressive Fed rate hikes mean more net interest income for banks with floating rate loans outstanding. Effective federal funds rate given by Y-Charts.

5. American Bancorp

Regional banking giant American bank (USB -0.17%) represents another smart way to make $100 work with the falling stock market. Although bank stocks are usually off buyers’ radars in a bear market, things are different this time around.

For the first time in history, the country’s central bank is raising interest rates in a plummeting stock market. While this will likely increase defaults for banks, higher rates also increase what banks generate in net interest income on outstanding floating rate loans. US Bancorp’s generally conservative operating approach, coupled with higher net interest income, should allow it to generate higher earnings per share even as delinquent loans increase.

The other big differentiator for US Bancorp is its incredible digital engagement. Through the end of May, 82% of the company’s customers were banking online or through a mobile app. Additionally, 64% of total loan sales were made digitally, up from 45% at the start of 2020. Digital transactions cost only a fraction of in-person or phone interactions, helping US Bancorp deliver higher returns. high on assets. than virtually all major banks.

6. NextEra Energy

Sometimes playing it safe can be a stroke of genius during times of heightened volatility. This is why buying $100 of electric utility stock NextEra Energy (BORN -0.09%) might be a good idea. Including dividends paid, NextEra has generated a positive total return for its shareholders in 19 of the past 20 years!

The obvious benefit of owning electric utility stocks is the predictability of their cash flows. No matter how poorly the stock market performs, homeowners and renters still need electric and gas service. Demand for these core services does not change significantly from year to year, allowing NextEra to accurately forecast its operating cash flow and invest in new infrastructure projects without compromising its dividend or its constantly growing profitability.

Another major selling point of NextEra Energy is its focus on renewable energy. No utility in the country generates more capacity from solar or wind power. Although green energy projects can be expensive, they have helped NextEra reduce its electricity generation costs and increase its profits by high single digit percentages each year for more than a decade. For context, most electric utilities are experiencing low single-digit growth.

7. Pinterest

Finally, add $100 to social media stock pinterest (PINS -0.79%) would be a genius move right now. Even though advertising-focused businesses have been hit hard by short-term economic uncertainty, clear competitive advantages — a theme on this list — can easily propel Pinterest higher in the long run.

For example, despite dropping 21 million monthly active users (MAUs) in the June quarter to 433 million, Pinterest reported that average revenue per user (ARPU) rose 17% globally. Not only have Pinterest MAUs increased when examined over multi-year periods, but it’s evident that advertisers have been willing to pay a premium to get their message in front of Pinterest’s user base.

What’s even more remarkable is that Pinterest’s operating model largely avoids the headaches associated with changes to data tracking software. Because Pinterest MAUs freely post the things, places, and services they like, merchants can target their posts/products to these potential buyers. This allowed Pinterest to become an important player in e-commerce throughout the decade.

About Miley Sawngett

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