Focus on Buying Quality During Market Dips
Whenever the market declines in a significant manner, there are typically two camps of investors. Some prefer to play defense and reduce their exposure to the sectors that are causing the most portfolio downside. This is certainly important, as it’s always difficult to tell just how long a pullback will last. Others are focused on finding the best stocks to buy for when the market makes a turn back to the upside, also known as “buying the dip”. This can be a very lucrative strategy that allows you to take advantage of intriguing prices for top-quality names.
With equities bouncing back in a big way over the last few sessions, investors that were brave enough to test the waters around the lows have thus far generated some nice alpha for their accounts. Keep in mind that not all stocks will bounce back after a market correction, but focusing on quality tends to provide you with the best chances of success. That’s why we’ve put together the following list of 3 no-brainer buy the dip stocks to help you stay focused on the best of the best.
Let’s take a deeper look below.
This leading warehouse club stock is well off of its 52-week highs and is a great example of the kind of company to look at for buy-the-dip opportunities. Costco currently operates about 830 membership warehouses that sell massive amounts of merchandise in the U.S., Canada, Mexico, the U.K., Japan, Korea, Taiwan, Australia, Spain, Iceland, France, and China. The company’s members are extremely loyal, as Costco’s renewal rate consistently comes in at over 90% globally, which speaks volumes about its business model. Costco
is a great pick for long-term investors since its products are going to be in high demand in any economic environment. People will always be buying products like food, sundries, and alcohol, and the company’s low prices on national brand merchandise and private-label products are hard for many competitors to beat. There’s also a lot to like about Costco’s potential in the eCommerce space, and international expansion is another strong factor for investors to consider. There haven’t been many pullbacks in Costco shares over the last year, which means the recent weakness could provide a decent entry point.
Advanced Micro Devices (NASDAQ: AMD)
Another great buy-the-dip candidate to consider is Advanced Micro Devices, a semiconductor company that continues to deliver quarter after quarter of record earnings. This leading supplier of microprocessors and graphics semiconductors used in computers, data centers, and video game systems is seeing incredibly strong demand for its products, a trend that should continue throughout 2022 and beyond. Investors should certainly be attracted to the fact that AMD is taking CPU market share from competitor Intel as that company deals with manufacturing issues.
The company also delivered some good news as it announced that it has received approval from China for the acquisition of Xilinx. This strategic move should help AMD
further strengthen its market position by adding Xilinx’s field-programmable gate chip array chips to its arsenal. AMD also just posted record quarterly revenue of $4.8 billion in Q4, up 49% year-over-year, and saw record full-year revenue of $16.4 billion, up 68% year-over-year. This is a company that is firing on all cylinders in a sector that should see strong demand for years to come, which is why it’s an ideal buy the dip chip stock to consider going forward.
Blackstone Inc (NYSE: BX)
Finally, we have Blackstone, one of the world’s largest alternative asset managers with over $880 billion in Assets Under Management as of Q4, up 42% year-over-year. Blackstone
is seeing heavy inflows thanks to its strong reputation, diversified product offerings, and the increasing demand for alternative investments given the massive run-up for equities over the last few years and a low interest rate environment. Shares of Blackstone have been rebounding sharply following the company’s recent earnings release and are currently trading above all of the major moving averages, which tells us that the stock has some momentum working in its favor at this time.
The company’s earnings almost doubled in Q4 thanks to solid investment performance, particularly in real estate. Blackstone reported Q4 EPS of $1.92 per share, up from $1.07 per share last year, and spent a record $65.8 billion to acquire new assets for its portfolio during the quarter. The stock also offers investors a 3.08% dividend yield, which is yet another reason why this industry-leading firm belongs on your shopping list.
Before you consider Blackstone, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Blackstone wasn't on the list.
While Blackstone currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.
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