By Brian McKay
While Zenruption has frequently commented on the potential of a recession coming soon, it doesn’t always mean you should stop looking for market opportunities. The stock market is not for the weak of heart right now and there is no shame in cash. If you have doubts, stop reading this article immediately and stuff the available funds in the mattress. We'll understand the rejection.
Apple Inc. (AAPL) – Yeah, Apple receives a massive amount of coverage. Many might think Apple has run its course as sales of iPhones show a decline. Leaks and speculation of the iPhone 7 show that it could be a game changer. With 93% of all smartphone profits going to Apple, a new and amazing phone could dramatically boost profitability. The 6s was more of an update. The 6 was a dramatic change that boosted profits equivocally. Expect the iPhone 7 to do the same. As Zenruption has mentioned in its article on early adopters, smartphones are still one of the few things that consumers want as soon as a big update happens. A buy now is a good bet on the September release.
With a current price to earnings ratio of 10.31, Apple is cheap and a safe buy.
The TJX Companies, Inc. (TJX) – Yes, the parent company of T.J. Maxx, Marshalls, Sierra Trading Post, etc. is a great stock. The American consumer has changed and T.J.X. companies really take advantage of this. TJX is a market leader and isn’t influenced by the same pricing pressures as companies like Macy’s because it makes last minute inventory purchases and has the flexibility to swap out inventory as needed. An economic slowdown would actually drive customers to the T.J.X. Companies.
A current price to earnings ratio of 22 might seem a little high for the retail sector but is totally worth it. Bet on seeing this stock over low $80 range this year.
Netflix, Inc. (NFLX) – Netflix is off a high of $133 a share down to $91.93 as of this writing. An international expansion that is proving very successful and an ongoing list of award winning original entertainment keeps this company growing. People want entertainment and cheap entertainment really plays into current household economic challenges. While Netflix faces some adversaries in the marketplace in Amazon Prime and Hulu, it has continued to assert its dominance. An expectation of doubling subscribers by 2020 means even greater net profit margins.
The current price to earnings ratio sounds insane at 328, but that is expected for a high growth stock in this space. Expect to see this stock back up to $115 a share this year.
Featured photo courtesy of Flickr, available under a Creative Commons Attribution-Noncommercial license
Brian McKay has his MBA from Boise State University and is one of those weirdos that has to check stock prices on his iPhone regularly. He still believes that investing in stocks should only be done with companies you like, think are socially responsible and respect. Brian is seriously thinking about adopting a dog that needs a home soon.
