When the stock market sends a company’s share price down through no fault of the company, it can be a great time to buy. And the recent market turmoil has been tough on many businesses, regardless of whether they’re outperforming or underperforming in their industries.
Here’s why these stocks look like bargains, and why today might be a good time to scoop up some shares.
Hot Clean Energy Stocks To Buy For 2019: Foot Locker, Inc.(FL)
Foot Locker, Inc. (NYSE:FL) is one of the many retailers whose stocks have taken big hits over the past couple of years. Like many of its peers, FL has rebounded – and its outlook appears brighter than most.
After all, the sneaker space still looks reasonably strong. Nike Inc (NYSE:NKE) stock is at an all-time high. adidas AG/S ADR (OTCMKTS:ADDYY) did the same in April before a recent pullback. While direct-to-consumer sales from those giants represent a threat to Foot Locker, it continues to outperform smaller rival Finish Line Inc (NASDAQ:FINL). I wrote in January that Foot Locker looks like the best play in the space – and with FL stock actually down a bit since then, I still think that’s the case.
There are risks here, particularly given FL’s mall exposure. The company’s omnichannel efforts suggest potential margin pressure as well. But sneakers should hold up well to e-commerce competition – customers still like trying on the product, and seeing it firsthand. Almost $6 per share in net cash provides some downside protection, and a 3.1% dividend yield offers income as well.
As we shall see, there are a number of similar cash-rich stocks with solid dividends in the retail space. FL looks like one of the more attractive – for investors willing to invest in the sector.
Hot Clean Energy Stocks To Buy For 2019: Hormel Foods Corporation(HRL)
Hormel Foods is the last stock on this list. It’s probably best known as the maker of SPAM, but it has 35 brands that hold the No. 1 or No. 2 spot in their category. It sells products in virtually every section of the grocery store, from the deli to the frozen food aisle. And it operates in both the retail and food-service sectors. Although Hormel is focused around proteins like meat and nuts, its business is well diversified.
Hormel has an investment-grade credit rating of A and an incredible 52-year streak of annual dividend increases. It’s a Dividend Aristocrat, placing it in rare company. The food maker’s 2.1% yield is modest compared to the yields of Dominion and Ventas, but that’s the high end of Hormel’s historical range. And the dividend has tended to grow by percentages in the high teens each year, far outdistancing the ravages of inflation. Hormel’s beta, meanwhile, is roughly 0.45, suggesting the stock is around half as volatile as the broader stock market.
Investors have pushed Hormel’s shares lower recently because changing consumer tastes have been a headwind. However, Hormel has a been adjusting, selling slow-growth brands (like Diamond salt) and buying higher-growth brands (such as Wholly Guacamole). More recently, it’s been augmenting its deli exposure, an area of the grocery store that has been growing four times faster than the grocery average. It has also been reaching further into the international arena (via a foundational acquisition in South America), which only makes up a tiny 6% of the business today. This is a cornerstone investment option for a low-risk portfolio, and now is the time to put it in the cart.
Hot Clean Energy Stocks To Buy For 2019: A.H. Belo Corporation(AHC)
The bull case for A.H. Belo Corporation (NYSE:AHC), the publisher of the Dallas Morning News, took a big hit this month. Disappointing Q1 results sent AHC shares tumbling, and wiped out a nice run: AHC had gained about 40% from late October through mid-April.
But back below $5, there’s still an intriguing case for the stock. The company closed Q1 with $54 million in cash – just over half of its market cap. The original headquarters of the Dallas Morning News in downtown Dallas is up for sale – and could fetch another $25-$30 million. And AHC has built out a digital marketing business as well.
Despite a potentially concerning decline in first-quarter results, AHC maintained its dividend this week, which yields nearly 7%. Should the downtown building sell, history suggests A.H. Belo will pay a special dividend as well.
As such, AHC is probably a better play for a tax-efficient account, given that dividend payments could be a big part of overall returns here. Even with disappointing results, there’s still an argument that AHC could have as much as 80% of its market cap in cash once the headquarters is sold.
It leaves a nice “heads I win, tails I don’t lose much” case for AHC — with solid income while investors wait for the story to play out.
Hot Clean Energy Stocks To Buy For 2019: Toll Brothers Inc.(TOL)
The Horsham, Pennsylvania-based, $7 billion market cap builder is lower than 7% this year, making it an ideal buy right now.
The company posted great numbers in the first quarter of 2018 with a nearly 20% jump in orders, a key metric for the future. A 7% home price increase and an astounding tax reform-related 87% net income improvement creates a very bullish picture for the future.
The stock is bouncing off the 200-day simple moving average (SMA), and it makes sense to buy in the $45.00 per share zone. Stops are suggested at $41.93 per share, and my target is $55.00 per share.
Hot Clean Energy Stocks To Buy For 2019: TJX Companies, Inc. (TJX)
The retailing industry isn’t a Wall Street favorite these days, but that’s no reason for investors to avoid TJX Companies’ stock. In fact, between healthy operating growth and increasing cash returns, there’s a lot to like about this off-price specialist.
Its 2017 fiscal year included more of the same steady, positive momentum that investors are used to seeing from this high-performing business. Comparable-store sales increased 2% to mark a slowdown from the prior year’s 5% spike. But TJX Companies enjoyed healthy customer traffic across its retailing brands as profitability held steady at 28% of sales. In a testament to its flexible operating model, 2017 was the 22nd consecutive year of rising sales at existing locations.
It benefits from industry upheaval and consolidation, and that fact supports management’s forecast for another year of modest growth ahead. And, as its recent 25% dividend hike demonstrates, investors can expect any operating gains to be supplemented by gushing cash returns.
A strong inventory position should help TJX Companies boost profitability in 2018 so that earnings rise by about 5% to $4.04 per share. Tax law changes have freed up cash, too, which executives aim to use to double stock buyback spending this year. Investors can follow that lead and pick up shares of this healthy business that’s stuck in an unloved industry.