Focus on strength in a weak market
Investors have definitely had their hands on it to start the year, with volatility hitting most market areas in a big way. It’s hard to know how long this weakness will last, but the great thing about investing is that there are always opportunities to be found regardless of the ups and downs. Even in a market filled with uncertainty, many stocks are turning to bid as investors look to add shares in companies that could be in 2022.
During sharp pullbacks, it is usually useful to focus on stocks that are showing relative strength, as this means that stocks are still in demand even in a weak bar. Several names are emerging as potential buys at this time due to how well they have weathered the current volatility. Oftentimes, the strongest stocks are the first to hit new highs when indices find a foothold, so keep that in mind if you’re interested in putting some money to work at this time.
Here are 3 strong stocks to buy in a weak market:
Bristol-Myers Squibb (NYSE: BMY)
This high-quality biopharmaceutical stock has just reclaimed the 200-day moving average with a salad and could be a great name to consider adding to start the year. Bristol-Myers Squibb offers a variety of conventional medical drugs and advanced biological therapies and is primarily focused on developing treatments for oncological, immunological, inflammatory, cardiovascular, and fibrotic diseases. Shares got a good boost after the company recently announced plans for a $5 billion share buyback program and provided financial guidance for 2022.
Bristol-Myers expects the company to have total revenue of $47 billion in 2022, which is an increase in the low single digits. The company will lose exclusivity in its best-selling drugs like Eliquis and Revlimid soon, but Bristol-Myers has a lot of exciting new drugs like the blood-thinning drug Reblozyl and recently launched drugs Zeposia, Breyanzi and Abecma that should help offset the revenue losses. With an increasingly diversified product portfolio, an attractive dividend yield of 3.44%, and a very attractive forward P/E ratio of 8.38, this is an undervalued stock with plenty of upside in the years to come.
Teck Resources Limited (NYSE: TECK)
This mineral and mining stock has reached levels not seen since 2018 and has been a bright spot in an uncertain market, which is why it should be on your shopping list. Teck Resources is a Canada-based mining company that is one of the largest producers of zinc and mineral coal in the world. The company also mines copper, lead, silver, molybdenum and bitumen. As the effects of the pandemic continue to fade, investors can expect metals and mining companies like Teck to see increased demand as economic activity picks up around the world.
Commodity prices for resources like copper, zinc and more should remain strong in the coming months, and the fact that Teck has operations in countries like Canada, the United States and Chile tells us that the country faces lower country-specific risks than many nations. its competitors. The company also does a lot of business with China, so if you think China’s economy is going to rebound sharply this year, Teck is a nice way to play that trend. Finally, a dividend yield of 0.51% and a forward P/E ratio of 6.35 makes this stock a potential bargainer even after its great performance last year.
If you haven’t picked a major market theme yet this year, it’s clear that investors are turning to more valuable names and out of growth. One such name that has seen some strong influxes to start the year is Deere & Co. It is the world’s largest producer of agricultural equipment and a manufacturer of construction machinery and lawn and garden equipment. Deere is a quality name that investors can feel comfortable adding during a weak market thanks to its strong recent earnings and the major role the company plays in the global farming industry.
With fourth-quarter EPS up over 70% year over year and dividend up 15%, it’s clear that Deere has some momentum heading into 2022. While the stock has drifted for about 6 months, there are several factors that could That the stock will lead to new heights in the coming months. Deere should be ready to cash in on all infrastructure spending both in the US and abroad this year, while higher crop prices could be another positive stimulus for stocks. This is clearly a relative strength leader in the market to start the year and could be a smart buy if we continue to see a rotation in value stocks.