Yesterday was a bad day for the US stock market. As a result of a higher-than-expected inflation reading, investors panicked and share prices fell heavily. At the end of the day, the S&P 500 was down 4.3% while the Nasdaq Composite was down 5.1%. For long-term investors such as myself, big market falls like this can create excellent buying opportunities. As Warren Buffett says, the best time to buy stocks is when others are fearful. With that in mind, here are three beaten-up US shares I plan to buy more of shortly.
Tech powerhouse
Let’s start with Microsoft (NASDAQ: MSFT), which was down 5.5% yesterday. It’s one of the world’s largest technology companies.
Microsoft is one of the first shares I’d buy if I was building a portfolio from scratch today. That’s because it offers both growth and defence.
On the growth side, the company has exposure to several high-growth industries including cloud computing, the metaverse, and video gaming. So, it’s well placed to increase its revenues and profits in the years ahead.
On the defensive side, many of its products are essential for businesses today. So revenues should hold up if economic conditions deteriorate.
Of course, there are risks to consider. If tech stocks continue to fall, returns could be disappointing.
However, with the stock now trading on a P/E ratio of 25, I like the long-term risk/reward skew here.
Brand power
Next up, athletic footwear and apparel giant Nike (NYSE: NKE), which declined 5.9% yesterday.
Nike has experienced some supply chain and cost challenges recently. And these issues may persist in the short term. However, given that the stock has fallen from around $180 in November to $106 today, I think a lot of the risk is now largely factored into the share price.
When these short-term challenges do subside, Nike should be well placed to grow its sales and profits. Not only is it likely to benefit from its shift to selling direct-to-consumer, but it’s also likely to benefit from the ‘casualisation’ fashion trend, which is showing no signs of slowing down.
Nike shares currently sport a forward-looking P/E ratio of about 28. That does look high at face value. However, given the company’s incredible brand power, I’m comfortable with the higher valuation.
Growth potential
Finally, I’d also buy shares in Lam Research (NASDAQ: LRCX), which fell 5.6% yesterday. It makes semiconductor manufacturing equipment.
This is a stock I’m quite excited about. In the years ahead, many countries are planning to build semiconductor manufacturing plants on home soil in an effort to avoid chip shortages. The US is one such country that’s set to increase domestic manufacturing significantly. Recently, it announced $53bn in government funding to get the ball rolling.
This ‘reshoring’ of semiconductor manufacturing should provide a huge boost for Lam as its technology is crucial for chip manufacturers. So, the future here looks very bright, to my mind.
It’s worth pointing out that the semiconductor sector, as a whole, is experiencing weakness now. This could persist for a few more quarters and potentially have a negative impact on this stock.
However, in the long run, I expect Lam Research to do well. With the stock trading at just 11 times this year’s forecast earnings, I see it as a bargain.
The post US stocks just tanked. Here are 3 shares to buy appeared first on The Motley Fool UK.
5 stocks for trying to build wealth after 50
Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin“ prices, now could be the time for savvy investors to snap up some potential bargains.
But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.
Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…
We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()
More reading
- How I’m investing £7,500 in my Stocks and Shares ISA
- 3 reasons why I think it’s the WORST time to sell my FTSE 100 stocks
- Down 26% in a day! ITM Power shares are falling fast. Here’s what I’d do
- The abrdn share price is falling. I’d buy while it’s cheap
- My £150 a month investment plan to generate long-term passive income!
Edward Sheldon has positions in Lam Research, Microsoft, and Nike. The Motley Fool UK has recommended Lam Research, Microsoft, and Nike. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.