I noticed something with this bear market. Most of the people I interacted with (not in person, of course, but by phone, text message or video conference) do not flee the panicked stock market. Instead, they are seeing the market crash caused by the coronavirus as an opportunity. And for those with some liquidity available, they wonder which stocks are the best choices to buy right now.
The best stocks to buy vary from individual to individual. A certain security may be suitable for one type of investor but not another. But I think there are some stocks which are smart alternatives for almost any type of investor. If you have $ 3,000 to invest, or even less, here are three stocks that may be just what you’re looking for.
Bristol Myers Squibb
Whether you are a growing investor, an income investor or a value investor, Bristol Myers Squibb (NYSE: BMY) it should be right in your alley. The big pharmaceutical exchange crashed hard during the market crash last month, but is also bouncing back to a great extent.
The consensus among Wall Street analysts is that BMS will increase its earnings by an average of over 18% per year over the next five years. Bristol Myers Squibb Eliquis and Opdivo’s successful drugs are both slated to rank among the five best-selling drugs in the world in 2024. With the acquisition of Celgene, the company now has even more growth drivers, such as the multiple myeloma drug. Pomalyst, the drug for blood diseases Reblozyl and Zeposia drug for multiple sclerosis.
The Bristol Myers Squibb dividend should also attract investors in income. Its dividend currently produces over 3%. The company has increased dividend payments every year since 2008.
Despite its strong growth prospects and attractive dividend, the BMS stock is a real bargain. Its shares are exchanged for earnings less than nine times expected. With a solid product range and a pipeline full of potential winners, Bristol Myers Squibb is expected to offer outsized total returns over the next decade.
For investors who want to buy stocks that have been hammered more than guaranteed during the market sell-off, I think MasterCard (NYSE: MA) should be the best choice. Payment processor shares rose up to 41% from their previous highs at some point in March. Even though Mastercard has rebounded somewhat, the stock is still well below the point where it was traded before the coronavirus crisis.
Mastercard is one of the best titles that I have personally purchased in the past few weeks. I like this stock for two main reasons: its commercial moat and its huge growth prospects.
If you are not familiar with what is a business moat, think of medieval castles. They had a moat around them to protect themselves from the invasion. Companies also have ditches that protect their market share from competition. Mastercard’s moat is its vast payment processing network. Enjoys a duopoly with Visa which probably won’t be overthrown.
As far as Mastercard’s growth prospects are concerned, I consider the company one of the main beneficiaries of the “war on money”. This term refers to the massive shift from physical currency such as cash and checks to electronic forms of payment. Social distancing and quarantines during the COVID-19 epidemic intensified the cash war as consumers turned online shopping even more. I think the trend is unstoppable – and I think Mastercard will be a big winner.
Some investors may prefer buying a security that has worked well during the stock market crash and is positioned to maintain its momentum once things return to normal. Teladoc Health (NYSE: TDOC) is an excellent example of such a stock.
Teladoc’s shares have skyrocketed while most of the shares have sunk. Telehealth quickly became a must with people trying to visit healthcare workers remotely instead of risking the possibility of getting infected with the new coronavirus while waiting in a doctor’s office.
I suspect that many people will like the convenience of using telehealth and will want to continue even after the COVID-19 crisis is in the rearview mirror. Teladoc is an obvious winner if I’m right. The company positions itself as the largest telemedicine service provider in the world and offers the widest range of services in the industry.
Teladoc Health could more than double its number of users simply by capturing more business with its existing customers, which include 40% of Fortune 500. Although it is the largest player in the field of telemedicine, Teladoc still has only around 1 % of that addressable market in highly developed countries.
I think the adoption of telehealth will increase significantly, with the growth of Teladoc Health which will change gears in the coming years. Buying shares of a leader in a fast growing sector is a smart move for any investor.