Buy The World’s Best Brands at Multi-Year Lows

The economy is slowing. But it’s not ending. While some companies may have liquidity issues or lose market share in the coming months from a slowdown, great companies will build on their success to thrive in the next bull market ahead.

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  • Investors looking to go long today should consider industry-leading companies that have leading brands. These companies tend to get better pricing, and therefore better protection from inflation. And they tend to have higher profit margins.

    Those are the perfect trends to buy during a time when markets are moving down.

    One industry leader is Nike (NKE). The sports apparel giant slid nearly 13 percent last week following earnings. While the company beat expectations, traders were surprised by a jump in inventory. That sent the price back down to a two-year low, closer to the start of the pandemic.

    Action to take: Nike is a classic example of an industry leader. And while growth has been slow in the past year, the company has seen shares drop by over a third in the past year. The stock has gone from more than 40 times earnings to 25 times earnings today. Today’s buyers can get a 1.3 percent starting dividend yield.

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  • For traders, a rebound from the steep selloff is likely in the coming weeks. The December $90 calls, last going for about $3.15, can potentially deliver high double-digit returns on a move higher in shares. Traders should look for a rally day in the stock to take a quick profit.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.