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3 'Strong Buy' Stocks to Add During the Market Downturn and Hold

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Today’s episode of Full Court Finance at Zacks explores the stock market around the halfway point of May after buyers stepped in at the end of last week to stop some of the recent bleeding. The episode then dives into three Zacks Rank #1 (Strong Buy) stocks to consider buying during the current market turmoil as Wall Street attempts to find a bottom.

The S&P 500 was right on the cusp of entering bear market territory (down 20% or more from its previous highs) last Thursday, with all three major U.S. indexes having touched brand new 52-week lows. Buyers then raced in to scoop up beaten-down stocks that are trading at far more reasonable valuations, better suited to the current interest rate environment.  

Despite the jump, it is nearly impossible to call a market bottom (or a top) in real time. Yet, it’s been proven that many investors feel the most exuberant and bullish as the market is peaking. Meanwhile, tons of those same people are the most nervous and hesitant about buying stocks as the stock market begins what will—in retrospect—mark the start of the next bull market.

Therefore, investors with long-term horizons might instead decide it’s best to slowly buy chunks of their favorite stocks or ETFs as they reach certain levels. Many successful investors are currently buying stocks despite the downturn as they dollar-cost average into strong stocks trading far below their highs.

Rising costs, the ongoing Russian invasion of Ukraine, and strict covid lockdowns in many key Chinese cities create unknowns that make life more difficult for companies and Wall Street. But it’s worth constantly remembering that there are still a limited number of other viable investment options to tackle 40-year high inflation even with interest rates on the rise.

Taking all of the current conditions into consideration, investors with outlooks of a few years and beyond might want to start buying stocks again. The first stock on our list of Zacks Rank #1 (Strong Buy) stocks to consider today is ON Semiconductor ON.

The chip maker that's originally a spin-off of Motorola in the late 1990s is driving growth by supplying its offerings to areas such as electric vehicles, industrial automation, and beyond. ON Semiconductor topped our quarterly financial estimates in early May. And ON shares have crushed the market and the Zacks tech sector during the past 24 months and the last decade.

Graphic Packaging Holding Company GPK is a sustainable paper-based packaging firm. GPK shares have also outpaced the market over the last two years and 10 years. Graphic Packaging stock also managed to hit new highs earlier this month following strong quarterly results. Graphic Packaging Holding operates a business that isn’t going out of style. Plus, it pays a dividend and GPK is trading at its lowest forward earnings multiple in over 10 years.

The last name on the list today is Marriott International, Inc. MAR. The hotel titan took a big hit during the coronavirus, but it’s bouncing back as people return to their pre-pandemic habits. Marriott beat Zacks Q1 earnings and revenues estimates on May 4 and it resumed its cash dividends “sooner than anticipated” amid strong demand for travel.


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Marriott International, Inc. (MAR) : Free Stock Analysis Report
 
Graphic Packaging Holding Company (GPK) : Free Stock Analysis Report
 
ON Semiconductor Corporation (ON) : Free Stock Analysis Report
 
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Zacks Investment Research

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