Buy-and-hold investors are comfortable taking long positions. To these investors, the only must-buy stocks are the ones they already own. However, this is not an ordinary time, nor is it an ordinary market.
No, this isn’t a “this time it’s different” message. Markets may not repeat themselves, but they frequently rhyme. It may be the first time some investors are dealing with a high inflation, high interest rate environment, but investors have a playbook for navigating this volatility.
Part of that strategy is finding opportunities where you can. Today, that can mean leaving a portion of your portfolio available to “ride the hot hand.” This allows you to buy a stock for several months to capture some gains without considering it part of your longer-term strategy.
With that in mind, here are three must-buy stocks that may create opportunities for investors through the end of the year.
Amazon (AMZN)
Up 58% in 2023, Amazon (NASDAQ:AMZN) has already been one of the comeback stories of 2023. However, after a strong earnings report, analysts are boosting their price targets and reiterating their bullish sentiment for AMZN stock.
In years past, that would have been due to the strength of Amazon’s cloud business. However, at the moment, investors should look to the strength of the company’s e-commerce business. According to Deloitte, e-commerce sales will grow between 10.3% and 12.8% compared to 2022. There’s little doubt that Amazon is well-positioned to take their fair share of this business.
Since earnings the stock has broken above its 10-, 20-, and 50-day moving averages and if momentum continues to build, it has a clear path to its 52-week high of $145.86. Analysts have an even more bullish outlook with an average price of $174.91 that would be an upside of over 28%.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) was an early star this earnings season. The streaming giant has embraced ad-supported revenue in a big way. And it’s finding out that while customers may like an uninterrupted streaming experience, they like a low price even more.
The company signed up more than 9 million new subscribers for the quarter and the company just reached the 15 million mark in subscribers for the ad tier. While that level of growth may not continue, the company is expecting that some of its premium subscribers will trade down to the ad-supported package. That’s a move that won’t trouble Netflix at all. This is sticky revenue for the company and it will help offset the cost of developing its original content.
Despite a pull-back since mid-summer, NFLX stock is up 39% for the year. However, this is a time when the correction creates an opportunity that was confirmed by the bounce the stock received after the company’s earnings. Investors who are looking for some holiday cheer could do worse than buy some NFLX stock.
Coca-Cola (KO)
Coca-Cola (NYSE:KO) is last on this list of must-buy stocks but should not be considered an afterthought by any means. The iconic beverage company has seen its stock recently trade at 52-week lows. This has been due, in part, to concerns about the effect of weight-loss drugs on consumer appetite for sugary beverages.
It’s too early to say if that thesis is correct. The more immediate concern may be that of a potential recession, combined with inflation affecting consumer spending habits. However, if the company’s fiscal second quarter 2023 earnings is any indication, the consumer is fine for now. Coca-Cola beat on the top and bottom lines and raised its full-year guidance.
If you have concerns about future earnings growth, that’s fine. Just because KO stock is a forever stock for Warren Buffett doesn’t mean it has to be one for you. However, with a growing dividend that is well covered by earnings and cash flow, and the potential for 13% or higher stock price growth in the next year, this may be a time to stuff some shares into your stocking this holiday season.
On the date of publication, Chris Markoch 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.
