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The long awaited market correction has happened. Is now the time to invest or will the coronavirus wreck more havoc on the world economy, the stock market, and your own portfolio? Is the silent warning for investors to hold on to cash still valid, or are their bargain investments today? How do you assess intrinsic stock value and pick the best stocks to invest in when there is still so much uncertainty? Here a few suggestions that we gleaned from the internet.
Invest in Disney for Cheap and for the Long Term
The Motley Fool writes that Disney stock may never be this low again. We wrote about why to buy and hold Disney just last year. Our argument was that the company is a fixture for family entertainment with its theme parks, huge cash of content and emerging online, streaming presence. The article echoes this sentiment and notes that while the stock has taken a hit as the coronavirus has forced closure of many theme parks, that will not last forever, and the remainder of its money-making potential remains not only intact but steadily growing.
Among the stocks that tumbled was Walt Disney (NYSE:DIS). The usually stable entertainment giant is down 14% since Feb. 21, and has fallen more than 20% from its all-time high in November. For a reliable profit machine like Disney, that’s a substantial decline.
It’s easy to see why the stock has fallen, though. All three of its theme parks in Asia are now closed. Much of its resorts business remains threatened by the coronavirus outbreak, which hammered the travel and tourism industries, and investors are also nervous after the surprise announcement that CEO Bob Iger was stepping down.
However, Disney stock is starting to look unreasonably cheap as investors seem to have forgotten about the positive catalysts that drove it to a record just a few months ago.
They go on to detail their reasons for believing that Disney is ripe for purchase and that we may be seeing a historically low price. There are and will be more bargains than Disney before this is over. Picking companies that will weather the storm and have excellent long term prospects is the key.
What Are Insiders Buying on the Downturn?
A good place to look for bargain stocks is companies whose executives start buying their own stock when the market falls. Market Watch details nine such instances.
Because they see their own businesses daily, company executives are suggesting through their actions that fears about the hit to economic growth because of COVID-19 are overdone. They’ve stepped up buying their own companies’ shares, and in all the right sectors.
- Six Flags Entertainment
- Cedar Fair
- Delta Air Lines
- Allegiant Travel
- Kinder Morgan
- Energy Transfer
- Enterprise Products Partners
- Huntsman
- Trinity Industries
These are a mixed group but the common feature is that the companies have been hit by reduced travel, lower energy consumption, and other factors related to the coronavirus scare. We wrote a short piece about who will survive the coronavirus pandemic. These may well be companies to add to your shopping list.
As always, do your own research and fundamental analysis before adding any investments to your portfolio. A useful tool in regard to when to buy or sell in such markets is a stochastic trend as it will provide insight into seemingly chaotic market situations.