When you start hearing about day trading at volume, you know the markets have gotten frothy and buying and holding long-term stocks isn’t a top priority for investors.
But times like these are precisely when it should be. Trying to time trades is tricky business, even for Wall Street bigshots who have been trading for decades with state of the art equipment and a lifetime of institutional knowledge – and occasionally an advanced degree in mathematics.
Trying to outsmart these people or play their game over the long term might be entertaining, but if your goal is to make money, I wouldn’t bother. Finding companies with solid fundamentals in key industries and buying for the long-term might be boring, but it makes money.
These companies deserve your attention for the future because of how well they’ve handled the past.
Long-term Stocks To Buy: Amazon (AMZN)
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There are few companies that can turn into a global retail brand the way AMZN has done. From a humble online bookseller in the 1990s to market juggernaut in just three decades, Amazon has been on quite the journey.
Now it’s hard for most Americans to imagine a day that doesn’t somehow involve an Amazon product. Whole Foods for grocery shopping (if you’re not buying supplies off its website). Prime for watching shows and movies. Of course, its bread-and-butter retail and logistics operations. And of course, cloud computing behemoth Amazon Web Services provides plenty of cash to keep all its new and existing ventures running.
When the pandemic hit, everyone realized how valuable AMZN had become. But its value is much more now, as it holds a nearly $1.6 trillion market cap. It is kind of a one-stock index of the entire modern economy. If you’re a long-term bull on the U.S., AMZN is a long-term stock for you.
Up 70% in the past year, its pace may vary but its continued growth isn’t in question.
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This company’s beginnings stand almost in direct opposition to that of AMZN. CLX made one product, bleach, for nearly 50 years and built a big business out of it.
Now more than 100 years old, CLX has diversified its product line a bit, though not significantly. Now it has a portfolio of around 50 brands that are sold in over 100 countries. Reliable names like Glad, Handi Wipes, Liquid-Plumr, Pine-Sol and Tilex along with its titular Clorox line. This is a classic long-term US stock.
During the pandemic, cleaning and disinfecting products have been in high demand at home and abroad. CLX stock remains rock solid. And that’s to be expected after growing through two World Wars, the Great Depression and everything else that has come its way.
Up 24% in the past 12 months, it’s still trading at a P/E of 21 — below the average forward P/E of the S&P 500 — with plenty of growth ahead.
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The growth of digital channels in the U.S. is mirrored in China, where its domestic market is almost an order of magnitude larger than U.S. market. The potential is huge.
Also, the Chinese market operates a bit differently than the U.S. Large companies tend to work with each other to leverage their most important assets rather than try to compete head to head.
But they also diversify. For example, JD is like the AMZN of China (and other Asian nations). It has expanded into logistics, AI, fintech and other sectors.
Yet for all of its strength, it trades at one-tenth the market cap of AMZN and that’s after a 127% run in the past 12 months. Certainly there’s some trade risk here, as the U.S. threatens to delist Chinese firms from U.S. exchanges, but JD is far down that list. This is a top long-term stock for the China’s and Asia’s consumers.
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This is the company that launched Elon Musk before he became the maverick CEO we all know today.
Even back then Musk was a handful, getting deposed as CEO after a couple years but still holding more stock than anyone else when eBay (NASDAQ:EBAY) purchased PYPL in 2002. That became the seed capital for Musk’s later ventures.
But beyond the personality, PYPL is a pioneer in electronic payments and now in peer-to-peer (P2P) payments with its Venmo app. Time and again Wall Street has dismissed PYPL as not having the kind of financial reputation or muscle to take on the big financial institutions in the digital space. And time and again, PYPL has proven them wrong.
The past year has been a boon for PYPL’s model and has showed that big banks weren’t altogether ready for the quick and massive shift to digital. And PYPL now has credit services as well as other payment platforms.
The stock is up over 113% in the past 12 months and it’s now here to stay.
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We’re well ensconced in the Mobility Age at this point. By that I mean what started as the digital revolution has now moved to the point where wireless networks keep us connected nearly all the time, much to some people’s chagrin.
But the fact is, despite the downsides, there are plenty of upsides too. And now that 5G telecom tech is upon us, data will be flowing even faster than before.
One the beneficiaries and leaders in pushing digital mobility further is QCOM, one of the world’s leading telecom companies. Its business model is unique because it develops chips and telecom equipment but makes money licensing the technology for others to manufacture and also taking a cut of sales.
Both U.S. and Chinese (and others) phone makers rely on state of the art QCOM chips, especially for 5G. QCOM just signed a new deal to rekindle relations with Chinese phone makers earlier this week. As long as mobility is a thing, this is a long-term stock to own.
The stock is up 75% in the past 12 months, yet the stock is trading at a P/E of 35.
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With unemployment nearing 6.7% and many states admitting that the pandemic has hampered their ability to accurately count the unemployed, there are a lot of Americans trying to figure out how to bring in a paycheck.
Many have turned to driving Uber or Lyft, although passenger numbers are down significantly now as well. And taxis are even worse.
That has led many to try their hands at turning their hobbies into businesses. And that’s where SHOP comes in. It’s a cloud-based platform that helps small and mid-sized business build out professional websites.
The stock is up nearly 1000% over the past three years, and much of that has come in the past two years, as the economy has slowed.
Vaccines may be on the way, and the government is working through another stimulus package, but the damage done to the economy has yet to be seen clearly given all the other issues facing the nation.
This stock is up 167% in the past year and has plenty of potential growth ahead.
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Launched in 1946 in Japan, SNE has been known to every generation since for various electronics. For decades, SNE made the best televisions in the world after launching the first all-transistor television in 1959 and taking the global television market by storm.
Then came the video generation. Then the Walkman generation, when SNE defined personal, portable music. And now, it’s the PlayStation videogame system.
Along the way, it has moved into the entertainment industry, on both the content and equipment sides. Its contributions to our electronic era are practically too numerous to list and Sony continues to be a formidable player.
The thing is, it generally cuts a low profile. SNE stock is currently up more than 43% in the past 12 months, yet trades at a P/E below 15. This durable, quality electronics firm may not garner headlines, but it still is a revered and important brand, generation after generation.
Disclosure:On the date of publication, Louis Navellier had positions in AMZN, CLX, JD, PYPL and SHOP in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.