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Saturday, January 28, 2023

9 Stocks to Buy for a Wild Ride in September

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Editor’s note: “9 Stocks to Buy This Month” was originally published July 9, 2020. It is updated monthly to reflect the current state of the markets and best stocks to buy for that month.

With the start of the fall season upon us, most Americans probably feel as if they were caught off guard. Considering the overwhelming nature of the novel coronavirus — a crisis that for the first time impacted every person in this country — it’s been difficult to think of anything else. But September is turning out to be quite volatile in more ways than one, necessitating some adjustments to stocks to buy this month.

First, President Donald Trump now has less than 60 days to make his case to the American electorate for a second term. A report from the New York Times revealed that his campaign spent lavishly but accruing minimal returns, posing a cash crunch now. To be fair, the President denies the allegations. Still, he stated that he would be willing to spend his own money to win.

To me, that signals desperation. Therefore, I wouldn’t be surprised to see Trump resort to dirty campaigning tricks, which may further exacerbate social tensions. Cynically, then, stocks to buy levered to self-defense may be a hot ticket this month.

Second, I appreciate the fact that the unemployment rate went down in August, while jobs added represented a positive surprise. However, let’s not forget about permanent job losses. This metric actually increased 18.6% against the prior month. As a result, you may be better served with a healthy dosing of dependable stocks to buy this month.

  • Walmart (NYSE:WMT)
  • Home Depot (NYSE:HD)
  • Teladoc Health (NYSE:TDOC)
  • Smith & Wesson Brands (NASDAQ:SWBI)
  • 3M (NYSE:MMM)
  • Wheaton Precious Metals (NYSE:WPM)
  • Nike (NYSE:NKE)
  • Gilead Sciences (NASDAQ:GILD)
  • Sociedad Quimica y Minera de Chile (NYSE:SQM)

Finally, we can’t be complacent about the novel coronavirus — it’s what got us in trouble the last time around! While we should take encouragement that new daily cases are declining, Covid-19-related deaths have continued to rise on a cumulative basis. Thus, plays on the pandemic are still viable.

In other words, September is turning out to be a wild month as well. Take advantage with these best stocks to buy.

Stocks to Buy This Month: Walmart (WMT)

Despite Strong Earnings, It's Tough to Justify Walmart Stock's Valuation

Source: Jonathan Weiss / Shutterstock.com

Having suffered so much, I speak for all Americans: we are absolutely done with the coronavirus. Unfortunately, the coronavirus may not be done with us just yet. With a new spike of cases sprouting in Spain and France, it suggests that Europe is on the cusp of a second wave. Unfortunately, this may be a harbinger for us, necessitating a look at one of the most reliable stocks to buy this month, Walmart.

To be blunt, I think names that serve essential needs, such as Kroger (NYSE:KR) and Albertsons Companies (NYSE:ACI), offer a solid take on the crisis. But as an “everyman” bet against unknown developments, I’d put my money on WMT stock. As a big-box retailer, it offers pretty much anything you need or want. Further, its everyday low pricing attracts the widest net of customers possible.

Also, keep in mind that the bull case for WMT stock doesn’t necessarily revolve around a 24/7 crisis mentality. After all, September means that in a few weeks, we’re going to be in the heart of the holiday shopping season.

If we ever needed holiday cheer, this year will be it. Therefore, don’t count out Walmart.

Home Depot (HD)

the outside of a home depot store

Source: Jonathan Weiss / Shutterstock.com

As a home repair and renovation specialist, Home Depot is simply one of the best stocks to buy in any environment. Bull market or bear, Murphy’s law doesn’t care. I learned that lesson the hard way when my smoke detector started screaming at three in the morning – it’s always three in the morning, isn’t it? – forcing me to replace the batteries.

Fortunately, I was prepared. I had my 9-volt batteries and a telescoping ladder. Further, I have an ample set of tools and accessories should anything else go awry. The pandemic has been a lesson of basic preparedness for all of us, driving the narrative for HD stock.

Another reason to consider shares is that 2020 is turning out to be a rotten year. From the pandemic to economic woes to outbursts of violence throughout this nation, we’ve been through a lot. Unfortunately, we’re only halfway through.

As it stands, we’re facing a record-breaking hurricane season and unusual climate events. Honestly, who knows what surprises await us? While this is somewhat of a cynical play, I believe having some exposure to HD stock makes sense.

Teladoc Health (TDOC)

teladoc health logo on a mobile phone screen

Source: Piotr Swat / Shutterstock.com

You can make the argument that Teladoc Health would have been one of the best stocks to buy this month irrespective of the coronavirus. Although I previously didn’t like the idea of buying TDOC stock following an already robust upswing, I can appreciate its fundamental catalysts.

Most bulls will focus on Teladoc’s technological aspects as well as its economic value-add. With this platform, you can receive expert medical advice from the comfort and privacy of your own home. Logically, this saves the user time from having to sit in traffic and wait around once in the clinic/office.

However, Teladoc also addresses iatrophobia, or the fear of doctors. By getting patients to open up about their medical conditions, doctors and nurses can potentially improve health outcomes, perhaps dramatically so. This is a great non-coronavirus-related tailwind to consider.

Further, TDOC still has a bullish narrative regarding Covid-19. Even if we don’t suffer a second wave, the flu season may compound societal worries. Therefore, fewer people will be willing to see a doctor in person, thereby boosting the case for Teladoc stock.

Smith & Wesson Brands (SWBI)

Image of a pistol and several bullets laying on a dark grey surface

Source: Supakorn Pe / Shutterstock.com

When former Vice President Joe Biden picked Kamala Harris as his running mate, President Trump predictably launched into attack mode. Presumably, many conservatives are licking their lips because they view Harris as a liability. However, Harris arguably has a likable personality, which could serve this ticket well.

But whatever you think about Biden’s pick, one thing is for certain: it’s sending a chill down gun advocates’ spine. When it comes to gun control, Harris is very liberal. As MarieClaire.com argues, if elected, the pair could enact major gun control legislation. That’s not great news for the Second Amendment but is a strong catalyst for Smith & Wesson Brands.

Granted, SWBI stock faces longer-term pressure under a liberal administration. But in the run up to the election, I see this as one of the more robust stocks to buy this month. Certainly, if polls show Trump weakening, it would be all the better for the iconic gun manufacturer’s valuation.

Moreover, you have catalysts for SWBI stock outside of direct political motivations. Primarily, people are scared of rising chaos in society. The worse things get, the more likely they’ll turn to Smith & Wesson for protection.

3M (MMM)

a photo of 3M protective masks

Source: r.classen / Shutterstock.com

Obviously, no one wants this crisis to worsen. But in case it does, you’ll want to put applied science and industrial firm 3M on your list of stocks to buy in September. As one of the leading manufacturers of N95 respirators and other personal protective equipment (PPE), MMM stock has enjoyed a significant uptick in relevance this year.

Further, a devastating Covid-19 study out of California demonstrates how important 3M really is. Apparently, a lack of emergency inventory of PPE caused unnecessary deaths and financial costs. Given how effective 3M-branded PPE is, consumers will seek out these products whenever they become available, even if they must pay a hefty premium.

Now, some analysts argue that once the pandemic fades, MMM stock will return to its normal, frustrating self. I disagree. Evidence indicates that economic crises can leave mental scars that last for years. It wouldn’t surprise me in the least to see consumers stock up on 3M’s PPE well after this catastrophe has been resolved.

Wheaton Precious Metals (WPM)

gold and silver bars (stocks to buy)

Source: Shutterstock

It seems like no matter what the market environment, gold is always risky. Therefore, you should take the idea of Wheaton Precious Metals being one of the best stocks to buy with a grain of salt. It’s not that I don’t believe in WPM stock because I do. Rather, this is a sector that has produced much disappointment.

Still, I hate to use this phrase, but this time could be different. For one thing, it is different. While we’ve suffered serious pandemics before – most notably the H1N1 pandemic of the late 2000s – we’ve never seen state and federal governments impose stay-at-home orders. Unsurprisingly, this imposed a hard stop on the economy, making WPM stock quite intriguing.

Primarily, the doom and gloom prognostications that will shoot gold to five-digit prices are just a tad more credible today. Frankly, the Federal Reserve doesn’t have many monetary weapons other than to adopt as accommodating a policy as possible. Theoretically, this should be very good for gold.

I also like Wheaton for its business model. As a streaming company, Wheaton doesn’t have the direct risks associated with all-or-nothing mining projects.

Nike (NKE)

Source: mimohe / Shutterstock.com

At first glance, the storyline for Nike being among the stocks to buy may not be that appealing, especially during this crisis. It’s not just about health concerns, though that is obviously a real threat. Rather, we have a severe economic emergency as well. As I mentioned near the top, permanent job losses have accelerated worryingly, contradicting the implications of an otherwise positive August jobs report.

Despite the terrible optics, NKE stock still enjoys bullish fundamentals. For one thing, we’re seeing a bifurcation in the economy. A great example is unemployment by race. Only white workers collectively enjoy a single-digit unemployment rate. Second, the unemployment rate for college-educated workers is 5.3%, which is far better than the rest of the nation.

In other words, those who work higher-paying office jobs have been insulated from this crisis. Indeed, because they don’t have to commute, the pandemic has been a financial boon. Better yet, they’re willing to spend, bolstering bullishness toward NKE stock.

Gilead Sciences (GILD)

Gilead Sciences Stock: Still Cheap but Don't Count On a Coronavirus Rally

Source: madamF / Shutterstock.com

Early into the coronavirus outbreak, Gilead Sciences enjoyed a significant lift higher. Thanks to a repurposed drug called remdesivir, Gilead had a potential treatment candidate ready. Further, the drug received support from both President Trump and White House health advisor Dr. Anthony Fauci, one of the notable instances of their public consensus.

However, the narrative began shifting toward vaccine development. As biotechnology firms raced for a viable, long-term solution, the case for remdesivir faded. With it, GILD stock no longer appeared like the robust contender among stocks to buy that it once was. To confirm, shares are in the red on a year-to-date basis at time of writing.

Nevertheless, contrarian investors may want to reconsider the case for GILD stock. First, most Americans will refuse to take a coronavirus vaccine on the first round. Second, a U.K. clinical trial patient that took a vaccine candidate made by AstraZeneca (NYSE:AZN) suffered an “unexplained illness.”

That’s not going to be helpful for vaccine players. However, it may support the bullish thesis for Gilead Sciences.

Sociedad Quimica y Minera de Chile (SQM)

Sociedad Quimica y Minera (SQM) logo displayed on a mobile phone with the company's web page on it

Source: madamF / Shutterstock.com

Everybody is going crazy for electric vehicles these days. Despite the counterintuitive nature of this sector – why buy anything expensive during a health and economic crisis? – EV-based investments continue to defy gravity. However, picking individual stocks to buy in a particular month is a difficult task.

So, my solution is don’t bother. Instead, go for a company that specializes in the one commodity that all EVs require, lithium. For a mixture of growth potential and relative stability, you should look into Sociedad Quimica y Minera de Chile.

As one of the leading producers of lithium, Sociedad has enjoyed tremendous momentum following its March doldrums. Since around mid-May, SQM stock has formed a strong bullish trend channel. Because enthusiasm is so strong for companies like Tesla (NASDAQ:TSLA), I believe the upside movement is sustainable.

As I said earlier, SQM stock is a play on broader EV enthusiasm and not a specific manufacturer. Therefore, you don’t have to worry so much about consumer tastes, so long as they remain fixated on electric cars.

On the date of publication, Josh Enomoto held a long position in gold.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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