Invest In Expanding Companies During Bear Markets

Many great companies are built during bear markets. The 1930s saw the rise of Disney (DIS). The 1970s saw the rise of tech companies like Microsoft (MSFT). And the Great Recession started the rise of firms like Airbnb (ABNB) and Uber (UBER).

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  • Existing companies can find new opportunities too. Companies looking to expand while the economy look dire are looking beyond the current short-term fear to long-term opportunities. Investors should do the same.

    While there’s a lot of fear in the tech space right now, many firms are looking to expand production. That’s particularly true of chipmakers, who see rising demand for a variety of exciting technologies in the years ahead.

    Micron Technology (MU) just announced plans to build a new manufacturing plant, which will be the largest ever built in the US.

    With shares down 23 percent in the past year and nearly down half from last year’s highs, investors may want to look to the future now.

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  • Action to take: Investors can start accumulating shares here. The stock is currently going for less than 7 times earnings, and pays out a dividend yield just under 1 percent. But with expanding opportunities in the years to come, earnings will expand. And the stock’s earnings multiple will expand in a bull market too.

    For traders, the March 2023 $65 calls, last going for about $3.10, seem well priced here. Traders can start to buy now, but should use any further market weakness this month to add to that position ahead of a move higher.


    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.

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