The smartest stocks to buy with $ 300 right now
PAttention pays off when it comes to investing on Wall Street. Although there were 38 double-digit percentages of decline in widely followed countries S&P 500 Since the early 1950s, each of these declines has finally been put in the mirror by a bullish rally. In other words, it really matters when you buy stakes in big companies. What is important is your determination to allow your investment thesis to unfold over time.
Another advantage of investing in the stock market is that you don’t need to have Warren Buffett’s portfolio to build wealth. With most brokerage firms eliminating deposit requirements and trading commissions for companies listed on major US stock exchanges, any amount of money can be used effectively to grow your nest egg.
If you have, say, $ 300 on hand that won’t be needed to cover emergencies or pay bills, that’s more than enough to buy some of the smartest stocks on Wall Street right now.
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Alliance of Walgreens boots
For value investors and income seekers, one of the smartest things to do right now would be to grab shares of the drugstore chain. Alliance of Walgreens boots (NASDAQ: WBA).
Generally speaking, health stocks are very defensive and are not often affected by economic contractions or recessions. This is because health concerns don’t care whether the economy is doing well or badly, resulting in a constant demand for pharmaceuticals and medical devices, among others.
But the coronavirus pandemic has dropped the hammer on drugstore chains like Walgreens, which depend on foot traffic to generate everything from drugstore and clinic revenue to grocery and non-discretionary purchases. This (hopefully) unique event is your opportunity to acquire shares of Walgreens at a discount.
The pharmacy chain is already well under way in the implementation of a multi-point turnaround plan aimed at supporting organic growth and increasing its operating margins. The company predicts annual cost savings of at least $ 2 billion by fiscal 2022, but has spent aggressively on digitization efforts that will entice consumers to order online. Although online retail sales make up a very small portion of Walgreens’ total sales, direct-to-consumer sales is one area where consistent double-digit growth can be seen.
Equally exciting is Walgreens’ partnership with VillageMD. In an industry first, the duo will work together to deploy up to 700 full-service co-located clinics at Walgreens stores in more than 30 U.S. markets. While most in-store clinics handle vaccines and the common cold, the Walgreens-Village® partnership will feature comprehensive care and on-site doctors. This approach should help attract repeat patients and could direct those people directly to Walgreens’ higher margin pharmacy.
Walgreens Boots Alliance shares currently hit just over nine times Wall Street’s consensus earnings per share for fiscal 2022, which is well below its average price-to-earnings ratio of 21 over the past five years. For starters, income investors will earn a 4% return, the highest in the market, patiently waiting for Wall Street to come to its senses.
Image source: Getty Images.
Green thumb industries
Over the past two years, we have seen the legal cannabis industry flourish in North America. But during that time, only a small handful of marijuana stocks really stood out for all the right reasons. Such a pot stock which has a very good chance of being an industry leader throughout the decade and therefore would be a smart buy right now is Green thumb industries (OTC: GTBIF).
Before I get into the details of Green Thumb, I think it’s important to point out that the federal government doesn’t need to legalize weed in the United States for marijuana stocks to be successful. As long as the Department of Justice allows individual states to regulate their own industries, legal cannabis may be one of the fastest growing industries of the decade. Currently, 36 states have legalized medical marijuana, 18 of which have also passed legislation allowing the consumption and / or retail of cannabis for adult use.
As for Green Thumb, it is an American multi-state operator which opened its 60th dispensary this week. In total, it has 110 retail licenses – meaning it can open an additional 50 dispensaries – and it has a presence in 13 states.
Many of the markets Green Thumb has chosen to operate in have annual sales potential of $ 1 billion and distribute retail and grow licenses on a limited basis. For example, Illinois limits the number of retail licenses it will issue in total and to individual businesses. Meanwhile, Virginia is assigning dispensary licenses by jurisdiction.
The point is this: Green Thumb focuses on a number of markets where competition is deliberately reduced by regulators. This should ensure the company has a healthy percentage of sales in the key markets in which it operates.
A final feather in the hat for Green Thumb is its product mix. While the dried cannabis flower may be the first thing you think of when it comes to selling marijuana, around two-thirds of Green Thumb’s income comes from derivatives such as edibles, oils, and potatoes. vapes. Derivatives are less likely to be in surplus and generate higher margins than dried cannabis flower. In short, they are Green Thumb’s ticket to recurring profits.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
Berkshire Hathaway (B shares)
An exceptionally smart third stock to buy right now with $ 300 is a conglomerate Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B). I’m talking specifically about Class B (BRK.B) shares, since each Class A share costs around $ 419,000.
While Berkshire Hathaway isn’t exactly a household name, its CEO Warren Buffett certainly is. Since taking the helm in 1965, Buffett has run his business at an average annual return of 20%. Including the 20.4% gain that Berkshire Class A shares have recorded since the start of the year through July, we are talking about an overall gain of almost 3,400,000% since December 31, 1964. , as well as worth over $ 500 billion. created for the shareholders of Berkshire Hathaway. Past performance is no guarantee of future results, but it is difficult to dispute such long-term growth.
One of the reasons Warren Buffett has been so successful over the years is his love of dividend stocks. My backhand calculation shows Berkshire Hathaway grossed over $ 4.3 billion in dividend income in 2021, not counting their preferred 8% return on their $ 10 billion. Western Oil investment. Based on Berkshire Hathaway’s initial cost base, Buffett’s company generates a return on cost of over 4% (or nearly 5% if you factor in the Western preferred dividend).
Another reason Berkshire Hathaway has performed so well for so long is Buffett’s affinity for packing his firm’s investment portfolio with cyclical companies. Today, information technology, financial services and consumer staples make up over 80% of Berkshire Hathaway’s invested assets.
While recessions are inevitable, Buffett knows that the US and global economy spends disproportionately longer growing than contracting. He is simply playing a numbers game that strongly favors long term investors.
Given its long history of outperforming the market, Berkshire Hathaway is a solid, if not boring, way to increase your wealth.
10 stocks we prefer over Berkshire Hathaway (B shares)
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Sean Williams owns shares of Walgreens Boots Alliance. The Motley Fool owns shares and recommends Berkshire Hathaway (B shares) and Green Thumb Industries. The Motley Fool recommends the following options: $ 200 long calls in January 2023 on Berkshire Hathaway (B shares), $ 200 short buys in January 2023 on Berkshire Hathaway (B shares), and $ 265 short calls in January 2023 on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.