This week, the stock market is experiencing a major bounce as investors shake off rising uncertainties. While this bounce has been noteworthy, it is not very likely to last.
Valuations in the technology sector are still elevated, and it will only take one negative news event for the market to retest the previous lows. Many economists have said the Federal Reserve is not yet “behind the curve.” However, recent economic data has proven otherwise, and this is not the first time the Fed has been wrong.
There are serious cracks in the labor market that are being overlooked, and the consumer is swimming in shallow waters. In addition, tensions are rising in the Middle East, which presents real risks. Further escalation into the 2024 Presidential Election will spell bad news for the market. Investors should consider these three companies to weather the storm and strategically position their portfolios for the volatility ahead.
Let’s discover the top three stocks to buy in August as volatility persists in 2024.
Waste Management (WM)
Waste Management (NYSE:WM) is the first company on the list of the top stocks to buy in August. The company performs well during times of uncertainty, and its strong outlook for 2024 provides an extra layer of stability.
Waste Management is one of the largest environmental services companies in the world. It primarily provides waste collection, disposal, and recycling services across North America. Furthermore, the company has grown primarily through acquisitions and strategic investments in renewable energy. It recently announced the acquisition of Stericycle, a leading American medical waste company, for $7.2 billion. The company expects the acquisition to be cash flow accretive sometime in the second quarter of FY25.
In its latest quarterly results, revenue increased 5.5 % yearly to $5.4 billion. Additionally, adjusted EBITDA swelled 10% to $1.62 billion, with adjusted EBITDA margin hitting a record 30%. Management’s continued strong execution makes WM stock a stellar pick in the wake of market volatility in 2024.
Parker-Hannifin (PH)
Parker-Hannifin (NYSE:PH) is the second company with significant long term upside potential. Its diversified product portfolio of critical technology and components for the aerospace, automotive and industrial sectors makes it well-positioned to outperform.
Parker-Hannifin is an industrial stock you may have never heard of before. However, its products are integral to powering countless applications, from aircraft to automobiles. It is set to benefit from increased government spending from policies like the Inflation Reduction Act. The company’s products power a wide array of clean energy technologies, including solar, wind, hydrogen and energy storage.
Moreover, investors cannot overlook its robust earnings, EBITDA, and free cash flow profile. In FY24, revenue increased 5% yearly to $19.93 billion. Adjusted segment margin increased by 200 basis points to 24.9%, with adjusted earnings per share up 18% to $25.44. The cherry on top was its free cash flow, hitting a record $3 billion, putting the company on track to hit its financial targets for 2029.
Goldman Sachs (GS)
Goldman Sachs (NYSE:GS) is the third and final company set to do exceptionally well in the coming years. After extremely tough operational years in 2022 and 2023, Goldman Sachs appears poised for a huge comeback.
Goldman Sachs is a leading investment banking giant with an incredible record of returning value to shareholders. While the company is cyclical, it has emerged stronger out of every major financial crisis in the last several decades. Its growing dividend is also a show of confidence in management’s ability to navigate through tough macroeconomic conditions.
Additionally, its valuation is still attractive despite the stock surging 27% yearly. Goldman Sachs is trading at 14 times forward earnings, and its investment banking and wealth management divisions are thriving in 2024. Deal flow in the IPO market has rebounded substantially since the market suffered from inflation and higher interest rates in 2022. With net earnings up 150% in the second quarter, GS remains one of the best stocks to buy now.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
