Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
The markets are currently going through another phase of volatility — which is no surprise with the ongoing pandemic and the impending U.S. presidential elections. Investors’ best bets are to choose stocks that are on the safer side — and these are usually the big names. We’ve put together three of these stocks for you to consider buying as we head into a volatile month.
Stocks to Consider in a Volatile Market
2020 has not been calm year for the stock market, to say the least. With the U.S. presidential elections just around the corner, and daily coronavirus-related news impacting the markets — it’s likely that 2020 won’t end calmly.
One strategy you could take to prepare for future stock market volatility is choosing giant stocks that have been tried and tested in difficult times. With that said, consider looking at the following three stocks during a volatile stock market:
Netflix needs little introduction, being one of the hottest entertainment services on the market right now. Even with the arrival of other streaming platforms, there is little reason to think Netflix will be significantly affected.
The company’s quarterly report for Q3 2020 was slightly underwhelming. The stock did fall in the session after the news. Analysts do not think much of it, and believe in the medium to long-term potential.
Netflix’s subscription numbers were lower than expected, seeing 2.2 million subscribers while expecting 2.5 million.
The streaming service’s numbers appear to be flagging following an excellent first two quarters.
Earnings per share was recorded as $1.74, up 18% from the last year.
The company quite comfortably beat its revenue estimates, bringing in $6.4 billion, which is up 23% from the same time last year.
Texas Instruments is a technology company that manufactures semiconductors and integrated circuits. The company’s products are used in a variety of devices, including calculators and microcontrollers. Its analog chips and embedded processors account for a majority of its revenue. It is one of the top 10 semiconductor companies worldwide based on sales volume.
Texas Instruments has seen a phenomenal Q3, with the quarterly report beating all expectations handsomely. Analysts have subsequently raised their expectations for the company. Prospects look good for the company, as is justified by the financial figures that you can see below.
The Q3 2020 quarterly report recorded an earnings per share of $1.45.
Revenues were reported as $3.82 billion, a 1.2% from the same time last year.
Investors expect the company’s performance to improvise as more users pick up electronic devices for work and entertainment during lockdowns.
Alphabet is the company behind Google and is one of the largest companies in the world. Despite tough antitrust cases and general negativity surrounding its policies, Alphabet is holding its ground as a buy. The company’s multiple streams of revenue and cutting edge solutions give it a good outlook for the future.
Quarterly expectations for Alphabet are high, with analysts predicting the company to surpass revenue estimates. Analysts predict some income streams, like Google advertising, to decrease, while others are expected to go up. The company is expected to face its antitrust case on the day it releases its Q3 2020 report.
Brain White of Monness projects a Q3 revenue estimate of $39.92 billion and an EPS of $9.43 EPS.
Alphabet’s Q2 2020 report saw it beat analyst expectations, posting a revenue of $38.3 billion, which was driven by strong growth in Google Cloud.
Revenue did go down 2%, a rare occurrence for the company, down from $41.16 billion from the quarter before.
YouTube ad revenue was one of its largest revenue generators, bringing in $3.81 billion; Google cloud brought in $3 billion.
The company lost more on its “other bets” in Q2 2020 than it did the same time last quarter, $1.12 billion compared to $989 million.
These are stocks worth considering for the medium to long-term, and they have generally proven to be good against volatility. The fundamental analysis shows good signs for these stocks.
The U.S. election is going to have a tremendous impact on the markets, with some sectors just raring to go. In any case, however it turns out, investors need to be prepared to handle their capital carefully.
What do you think of the stocks listed here? Do you have any recommendations? Let us know in the comments below.
Disclosure:Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firms specializing in sensing, protection and control solutions.