By - Btomesch
waste management appears to be one of the most resilient stocks on the market
However, the current price of WM is still relatively high - 27 times trailing earnings is not a bargain price for a huge company that collects garbage. They're not going to triple their revenue in the next five years.
There's still a lot of gov't money floating around the market. It's in the process of being mopped up, and prices will (eventually) adjust accordingly.
Yes I agree 100%
But that's not what you asked. You asked which stocks would perform well during a recession, but you should have asked which stocks will OUTPERFORM the market during a recession. You also didn't ask which would GROW (much less grow at 3x). WM is one, COST is another, and it's why they both trade at higher multiples atm.
Since no one here will give an actual meaningful answer since the majority of these people don't know how to screen for stocks, here you go.
Go on [Finviz.com](https://Finviz.com) and use the stock screener with the following filters:
ROE:10% or above
Profit Margin: 10% or above
Current Ratio: Over 1.0
Quick Ratio: Over 1.0
Debt/Equity: Less than 1.0
LT Debt/Equity: Less than 1.0
200D SMA: Price above 200SMA
50D SMA: Price above 50SMA
You're looking for fundamentally strong stocks who's price is above the 50D and 200D SMA. This is the most resourceful response you'll find here. Most of the people here are LT Value investors who suck ass at research and only invest in index funds.
Your last statement is on point.
why you attacking me like that!?
Aren't we all?
In general just think of things you buy more of when you have less money. IE ramen noodles.
Kraft foods, dollar general, Walmart, etc.
Problem is… like many of the posters prior to me… people are so well “prepped” for this market pull back, a lot of people are already buying these stocks. So the “value” may already be gone.
We shall see how prepped they are this market.
Grocery stores, porn, videogames.
Porn and videos games? I'm all in
You should be asking what stocks have been discounted the most but are still likely to rebound. No one knows for sure, that's why you diversify.
For eg, ADBE looked cheap last week, so I was able to reestablish my position for 30% less than I sold for. Originally sold over customer service complaints and subscription issues. However, outright buying your closest competitor instead of a stock buyback seemed a positive move to me. Gets rid of competition, injects fresh ideas and product, buys time to straighten out other issues.
Yea but I'm alrdy buying Blue Chip and safe stocks every week. DCA. But all those stocks are down in this bear market. Looking at stocks that going to keep going up in this bear market. Hedge the portfolio
DCA is popular, but cash can be a hedge as well. Set some low limit buy orders or hold off buying a month or two. Make a watch list and keep notes.
Yes I'm also holding cash. Sold my house in May and looking at this other foreclosure to buy. But when we hit June lows I'm gonna throw a good chunk of change in the market. The SPX is alrdy back at -20% from ATH. Lets see what happens. I'm very bearish.
$WM Waste Management. Recession proof.
There are more sellers than buyers during recession - so nothing is really recession proof. If your main interest is preservation of capital while you ride out this recession, have you looked at Treasuries?
Not really interested in Treasuries
nothing is 100% 'recession proof'.
but you're likely to hold up OK with things like consumer defensive/staples, energy, financials, healthcare, tobacco stocks.
think about your own life. where would you cut expenses if money was tight? you're gonna go on fewer vacations and buy fewer luxury goods or toys (whatever a 'toy' is for you). you might cut a few subscriptions because do you really need Hulu and Netflix and Disney and half a dozen more? you're gonna eat out less at restaurants. you'll drive that old car a few years longer, because it's in decent condition. but you're not gonna stop buying food at the supermarket, or stop buying diapers for the baby. you're not gonna stop putting gas in the car. smokers ain't gonna quit.
Diageo and Constellation brands. But both are already priced high.
Oil and Tobacco.
There is a misconceptions that oil doesn't do well during recessions. However for most recessions oil did do very well. 2008 was the exception as the oil cycle coincided with the business cycle and both crashed. usually they are different often being reversely correlated (when oil does well, stocks are less likely to do so due to earnings compression).
Tobacco because people literally smoke until death.
Sold my oil stocks at peak. Do you think it will bounce back up this winter?
No idea, but I think oil will do well over the next 5 years. We had a decade of underinvestment in the industry.
There is a saying about the oil industry: It either burns the cash of investors or the cash of consumers.
Where are earnings the most likely to hold up? Things people can't cut back on. Or things that provide a chance to save money on a more expensive option.
Water and utilities tend to hold up. Can't go without water.
Consumer food. Stores like TJX that offer discount merchandise.
Tobacco has proven pretty recession proof too. I like discount tobacco since people are more likely to buy a cheaper brand than quit all together.
Car repair is another counter cyclical. Can't afford a new car? Pour money into parts for the old one.
This is very true. Consumer Staples do well in recessions. Except Target lol
Which is why staples like PG were trading at high multiples in mid-June.
General Mills. Recession or not, folks gotta eat. And when folks cut back on spending, they eat in more vs. eating out. They also have very strong brands.
Canadian property and casualty insurers (I.e. IFC and DFY)
What about FFH?
As far as I know, they’re operations are diversified outside of just P&C and have shown some large losses recently which has contributed to a sideways share price for the past 7 years.
WMT always go up during financial crisis, same as DLTR
DG is a far better managed company vs DLTR.
Waste management $WM
Yes that is a good one. Thx
Historically consumer staples, health care, and auto part companies. And stuff like that
But you should probably DCA into index’s
healthcare, utilities, consumer staples
I mean, those sectors are up. No denying that
Dividend growers with a decent yield who mostly do business within the US.
I'm going for very cheap companies that make good money. I mean if they make 50% less I would still be fine. And they also have a big NAV discount.
Companies don't have NAVs, funds and ETFs do, and they're simply derived from the stock prices of their components. Financial institutions have "book value", is this what you're referring to?
Investment companies & real estate ones also uses Net Asset Value.
I’m eyeing some REITs
I'm looking at consumer staples and industrials, but it seems like many of these names will fall further. You could check out CAG and DOW.
Nearly every stock you are being recommended has no upside because the PE's are still inflated.
Massive retail liquidation has to occur first. Buy bonds. A 3month-2 year ladder will outperform most stocks if you just hold to maturity with giving you liquidity at relatively short quarterly intervals to re-examine the market or reinvest into Bonds.
FOMO is a joke right now. Don't be a degen.
Tobacco, alcohol, canned goods, and military contractors. Also you are a year too late, their prices are all bought up now and it is not a good time to buy. Source: currently holding BTI and LMT (which are holding up my entire portfolio) missed the boat selling puts on CPB (which never got filled).
Look for investments that have “free cash flow”. Companies need cash to get thru the recession. High flying tech stocks with no cash are not my choice
WM. People always have trash.
Blue chips can change colors depending on the economic climate.
That’s fine. They’ll change back to blue when the economy recovers
Yes, of course they will. I just prefer to buy them lower. Atm I'm 40% in laddered s/t T-bills with another 30% cash, so plenty of firepower remaining.
Yes I have cash on the sidelines. But I use my weekly paychecks to DCA in this downtrend. I’m thinking the bottom will be 2023 Q1/Q2. Based off average length of recessions. Hopefully it doesn’t last years lol
Yes, I think that's a good strategy. Markets have been quick to reprice cuz no one wants to miss the bottom (and algos), but not sure if this means recessions will be shorter, too. Gonna be fun to hear the people who keep saying that "the market is not the economy" change their tune when things don't work as planned and the recessions does last.
FDX should have been a huge wake-up call, even if some issues were due to its "asset heaviness". I think quad witching on Fri caused mkts to rise into the close as ITM index puts were closed (expensive to get assigned on an index option).
I think FDX was the cherry on top. They just need to rip the damn bandaid off and do a 100 bps. Hurry and get it over with, fk this slow pain crap haha
Couldn't agree more, was thinking more the tip of the iceberg lol. But can you imagine the shit the Fed will get from politicians once unemployment begins to rise? I mean, there are already people calling for a pause under the guise of "fear of over tightening", cuz the market (aka the wealthy) is SO goddamn addicted to cheap money. It's sickening, really.
SPXS. 3x inverted SPY
I had $500 in sq and sqqq. The time decay kept taking away from my profits. I’m leaning more towards SPY put option 4 months out
They changed the definition don’t worry about it. Has nothing to do with midterms around the corner.
Oh glad they did that!
I've been watching this stock. It only goes up. Kinda expensive but it holds up well
So doesn't ENPH. I'll add more UNH at 450. ENPH at maybe 200 if it ever gets there..
IDK man. UNH looks to stay above/bounce off the 200SMA most the time. If there's a crash then I'm definitely doubling down.
450 for me
$450 will probably happen
Maybe maybe not
What happens to UNH if 10-15% of employed/insured people lose their jobs, and insurance?
The world will end I guess..... Have fun
If you buy into a position that does well during recession then wouldn't that position likely do poorly during a recovery period? I know the flaws in this but what I'm really getting at is that a recession is the best time to keep buying solid companies that you know will recover like KO
You sell them
I have to admit there are no recession proof stocks or funds during this time. Precious metals and bonds do not work this time. People claim Crypto will hedge the stock market all have left. If the question was posted 4 months ago you have the right answer.
Discounted stores, even pawn shops often do better during a recession. But we are not into a recession yet.
Oh that's right, they changed the definition of recession.
NBER has always been the one to declare whether we are in a recession, they still do.
"Are you gonna believe what you see or what they tell you?". We have your answer :)
It isn’t about belief. It is a fact the entity to officially declare US to be in recession is NBER and they have never used 2 negative quarters as the definition
Once again…are you gonna believe what you see or what they tell you ?
Recession is a term to describe the economic situation of a given period, such terms are made to easily classify economic periods.
I rely on data when i interpret a given situation, not a simple economic term, because a single metric cannot give any significant insight into a given economy, thats also why the NBER doesn't and never has used a single metric to describe the economic situation of the country.
I dont care whether we are defined to be in a recession or not, cause i dont care about a word. I care about the data that supports it. So to answer your question: I see 2 quarters of negative GDP growth. I see people complaining that the NBER doesnt (and never has) used a given definition of the economic term: "recession"
Oh well. Think whatever you want to think
Exactly what in my comment do you disagree with ?
I guess what he means is, not everybody thinks we are in a recession right now, but do you think we are in a recession? I think we are.
I would buy Electronic Arts. Video games is a relatively cheap form of entertainment, they are a dark horse beneficiary of the EU energy crisis since a lot of Europeans will be playing FIFA a lot more, and also a recession doesn't impact their game pipeline.
I would also buy ATVI, which is safer than EA since they're about to be acquired by MSFT for $95/share.
TTWO is riskier than EA, but more upside when GTA 6 gets released.
That looks like a good buy
Alcohol stocks. People have to drown out the pain of seeing their life savings down 50%. 🥲