Navigating through the unpredictable terrain of the stock market can be a challenging task, especially during periods of heightened volatility. Recent market actions have been a rollercoaster ride, with the three major U.S. indexes hitting record highs in July, only to be followed by a sharp global sell-off in early August. As the S & P 500 slipped away from mid-July peak levels, investors are left wondering about the path ahead. In the midst of this uncertainty, Wolfe Research, a renowned investment firm, has presented a list of favorite long-term stock ideas to help investors weather the storm.
Wolfe Research’s chief investment strategist, Chris Senyek, acknowledges the likelihood of continued choppy trading in the market. However, he remains optimistic about companies with solid fundamentals outperforming in the long run. Senyek introduced the firm’s “Greatest Hits List,” which comprises companies that consistently stand out on Wolfe’s 31 long idea stock screens covering various investment themes such as value, growth, capital creation, earnings quality, cash use, and dividends.
Among the notable stocks that made it to Wolfe’s radar are well-known companies like Expedia, Walgreens Boots Alliance, Paramount Global, Starbucks, General Motors, and Medtronic. These companies exhibit characteristics that align with Wolfe’s investment criteria, making them potential long-term winners in the market. Expedia, a prominent online travel agency, has seen a modest 3% return over the last twelve months with an estimated 2024 price-to-earnings ratio of 10. Analysts remain optimistic about Expedia’s future, citing potential growth opportunities despite tough competition.
Walgreens Boots Alliance, a retail pharmacy giant, has faced significant challenges in the current market environment. With shares down by 62% this year, the company has struggled to attract consumers amid increasing competition and industry headwinds. However, analysts see a potential upside of 25.3% based on consensus price targets, suggesting that there may be light at the end of the tunnel for Walgreens. Paramount Global, another standout on Wolfe’s list, is currently at the center of competing buyout offers and cost-cutting initiatives, indicating a potential turnaround in the offing.
Adapting to Change
Companies like Starbucks, General Motors, and Medtronic have also caught Wolfe’s attention due to their resilient business models and growth prospects. Each of these firms operates in different sectors but shares a common trait of adaptability and innovation. As the market landscape evolves, these companies have demonstrated the ability to navigate challenges and capitalize on opportunities, making them compelling investment choices for the long haul.
Wolfe Research’s curated list of favorite long-term stock ideas offers investors a roadmap to navigate through the market’s volatility. By focusing on companies with solid fundamentals and growth potential, investors can position themselves to ride out the storm and emerge as winners in the long run. While market conditions remain uncertain, the resilience and adaptability of these companies paint a promising picture for the future of investing.