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 have looked tentatively good going into the future, with certain sectors doing much better than others. The short to medium-term future is far from gloomy, even if it is going to be a bumpy road to recovery. But that doesn’t mean there aren’t legitimate opportunities.
Top 5 Stocks for October 2020
Several stocks have bullish prospects. Some are the result of businesses with solid fundamentals at seemingly low prices. Meanwhile, other businesses have benefited from an increased user base due to the work-from-home circumstances brought on by the pandemic.
October is shaping up to be a big month for investors, with volatility a definite concern as the U.S. Presidential election heats up. Analysts have been cautious for this reason, but nonetheless, there are stocks that are definitely worth checking out.
Many investors have turned to gold or strictly stick to dividend investing. But if you’re searching for stocks with high potential right now, take a look the following five best stocks to buy in October 2020.
1. Ryman Hospitality Properties, Inc. (NASDAQ:RHP)
Ryman Hospitality Properties is a hotel, resort, entertainment, and media company that owns several properties across the United States. This includes several local radio and television news stations. It also operates a real estate investment trust.
The hospitality industry is among the hardest hit of all sectors, but Ryman is preparing for the future where things return to normal. It might be a good stock to consider if you’d want a business that will outlast the pandemic. EPS is not terribly impressive at the moment at $-2.72 — but think on a longer-term. How much of a gain is this going to make in two years’ time?
Walgreens Boots Alliance is a holding company that holds Walgreens as a subsidiary. The latter operates America’s second-largest pharmacy store chain with over 9,000 stores across the nation. Walgreens Boots Alliance merged with Swiss Boots Alliance to create a global company that covers several verticals. These include household, cosmetics, and clothing products.
Walgreens has been affected quite strongly by the pandemic. But it is also taking several steps to prepare itself for the future, most notably digitization. The company’s boots.com experienced a 23% growth in sales year-over-year. It is also putting together a plan to increase front-end sales and customer retention.
Target is a well-known retail corporation, the 8th largest in the United States, and a part of the S&P 500 Index. It is also ranked 37 on the 2020 Fortune 500 list of the largest United States corporations by total revenue. Retail revenue took a hit due to the pandemic, but Target invested in e-commerce strategies, which has helped business.
Target is up nearly 20% year-to-date, which is excellent considering the circumstances we are living in. It’s a strong showing from a retail giant that you would think would have been battered by the pandemic. EPS at the end of Q2 was $3.35, which is an 84.07% increase year over year. Sales have also jumped by 24.3%. These are signs of a business that is worth looking into.
Carmax is a used car retailer and a member of the Fortune 500. Launched in 1993, the company has made headway since then, growing at a hefty pace. It is a subsidiary of Circuit City, a consumer electronics retail company. The business has performed well in this time, often turning inventory over multiple times a year.
Second-quarter expectations for CarMax beat analyst predictions by a significant margin, although that did not boost the stock price. Still, it has bounced back considerably following the market crash in March. While buying stocks after a market crash is generally risky, CarMax is a safer bet right now.
The company quite astonishingly turns over inventory 8–10 times a year. It is also expected to open almost ten more stores by 2022, and has an online platform to boot.
Sea Limited is an internet services company that provides multiple offerings, including digital entertainment, e-commerce, and digital financial services, via an integrated platform. The specific businesses it runs are Garena, Shopee, and SeaMoney. It is one of the largest internet providers in Southeast Asia and Taiwan.
Backed by Chinese giant, Tencent, Sea Limited doubled its revenue in Q2 2020 as compared to Q1 2020, bringing in $882 million. In August, already growing at a phenomenal pace, Sea Limited has frequently experienced single day jumps of as much as 9% on multiple occasions this year. It is poised to grow even more as emerging markets strengthen. This might be a strong buy, as many analysts would agree.
The markets are in an uncertain place at the moment, but generally speaking, we are slowly beginning to recover. The first wave of the pandemic appears over, with a protracted fight and the second phase to occur over the coming months.
Things will not be normal, but there are few arguments against investing now when stocks are cheaper than where they will be far into the future.
What stocks do you think look good in October? Do you agree with the stocks listed here? 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.