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3 Stocks to Consider Buying in November

Saturday, October 31, 2020 | Sean Sechler
3 Stocks to Consider Buying in November

Investors that have been waiting on the sidelines for a good buying opportunity might have their patience rewarded thanks to the recent volatility. With markets pulling back due to uncertainty related to rising COVID cases, a potentially contested election, and continuous delays with a new stimulus package, it might be a good idea for investors to consider doing some shopping. With that said, it’s important to be very selective about what stocks you are buying at this time, as there’s always the chance that markets are not out of the woods yet in terms of volatility.

Sometimes blocking out the noise and adding great companies regardless of headline risk is the best way to go when it comes to long-term investing. While many investors claim that they love when the market pulls back to take advantage of buying opportunities, it’s a different story for many when volatility rises and the time comes to add shares during a large market downturn. That’s why we’ve put together a list of 3 stocks to consider buying in November so that you can have the confidence to make educated investing decisions next month. Each one of these stocks has something different to offer and could be a big winner in November and beyond.

Alphabet Inc (NASDAQ:GOOGL)

All of the big tech companies reported their earnings last week, and while most of them sold off hard after their announcements Alphabet Inc saw constructive price action and rallied. This tells us that the stock is showing relative strength and could be in for even more upside once the major selling in the market subsides. This big tech company is the world’s leading internet search provider and the largest generator of internet advertising revenue, which is part of the reason why it’s been in the crosshairs of the Department of Justice. Sure, there is certainly risk in owning a company that is dealing with an antitrust lawsuit from the DOJ, but the upside here is undeniable.

Alphabet will continue to benefit from strong digital advertising spending as traditional media advertising fell below 50% of total ad spend in 2019 for the first time. You probably already know about the company’s iconic search engine Google, while YouTube is a platform that continues seeing strong growth and better engagement. With this stock, you also get exposure to the flourishing cloud industry. Google Cloud sales have a chance to double in 2021 thanks to more companies migrating to the cloud. Alphabet was able to increase revenues by 14% year-over-year in Q3 to $46.2 billion and also smashed analyst EPS estimates for the quarter. It is arguably the best big tech company to consider buying at this time.

Caterpillar (NYSE:CAT)

With Caterpillar, investors can own shares of the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. Caterpillar has seen sharp declines in demand for its products during the pandemic, but that doesn’t mean that investors should write the stock off entirely. It’s a company with an extremely strong balance sheet including $9.3 billion in enterprise cash and an expert management team that should be able to reduce costs and improve its financial position until the pandemic subsides. Once the economy rebounds, sales for Caterpillar should see a strong uptick while the demand in the housing market might work in the company’s favor during the short-term.

Caterpillar reported a year-over-year revenue decline of 23% in Q3 and the stock has pulled back significantly since the earnings release, offering a potentially attractive entry point for long-term investors. A bright spot in the report is that the company was able to generate $900 million in free cash flow in Q3, which was nearly double what analysts were anticipating. Caterpillar currently offers a 2.62% dividend yield and investors shouldn’t be worried about that payout getting cut anytime soon thanks to the company’s strong fundamental position.

Twilio (NYSE:TWLO)

The last stock on our list is Twilio, a company that offers a cloud-based communications platform that helps businesses to build and scale real-time communications within software applications. While it’s a stock that is has seen some heavy selling the past few weeks, there’s a lot to like about where Twilio is going with its groundbreaking technology. It’s a company that is taking full advantage of the current circumstances, as the pandemic has increased the demand for Twilio’s solutions that allow for company-to-customer virtual interactions.

While Twilio is still unprofitable, the company’s earnings tell us that it is growing at a rapid pace. Twilio reported Q3 total revenue of $448 million which was a year-over-year increase of 52%. Twilio’s customer growth was also impressive, as it reported over 208,000 active customer accounts as of Sep 30, 2020, an increase of 21% year-over-year. Twilio also provided Q4 guidance that would bring Q4 revenue growth to 36%-37% year-over-year. The company’s management is forecasting top-line growth of at least 30% annually for the next four years, and that might be a conservative estimate. This is a great example of a high-flying growth company that investors should consider buying on the dip.

 

 

 

Companies Mentioned in This Article

CompanyBeat the Market™ RankCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Alphabet (GOOGL)1.8$1,823.76+0.1%N/A35.24Buy$1,758.87
Caterpillar (CAT)2.4$182.21+4.3%2.26%30.32Hold$151.06
Twilio (TWLO)1.4$319.49-0.1%N/A-118.77Buy$328.64
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