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If a predominant theme exists for the best stocks to buy this week, it probably would be fear. From Mother Russia to Mother Nature and some monetary policy mixed in, circumstances appear unpleasant for investors. However, certain market ideas may be better geared to survive the turmoil.
Fundamentally, investors need to consider moving into the cynical realm with stocks to buy this week via defense plays. Granted, the underlying concept doesn’t align with everyone’s taste. I get that. Ultimately, though, in order to protect freedom and democracy, the defense of these principles will continue on.
Closer to home, Americans received a rude awakening from Hurricane Ian. No matter how advanced we become as a society, natural forces always win out. What we can do is to mitigate the damage, which is where certain stocks to buy this week offer relevance.
Finally, the economy suffers from a deflationary headwind. People can define this term in all sorts of wonky ways, such as the Federal Reserve’s hawkish policies taking a bite out of the money supply expansion. But the simple reality is that the markets are fading. Therefore, conservative stocks to buy this week may be beneficial.
Stocks to Buy This Week: AeroVironment (AVAV)
Source: Pavel Kapysh / Shutterstock.comNot the most recognized name among publicly traded defense contractors, AeroVironment (NASDAQ:AVAV) jumped into the mainstream consciousness this year. The company specializes in unmanned aerial weapons systems, particularly the Switchblade.
Throughout Russia’s invasion of Ukraine and the subsequent battle for self-determination and independence, drones represented significant tools. That goes for both sides. However, the Ukrainians have put their Switchblades and other Western-supplied weapons to great use. In September and over this past weekend, Ukrainian forces launched successful counteroffensives.
Fundamentally, AVAV represents one of the stocks to buy this week and perhaps for the rest of the quarter. As I write this, I’m hearing reports that Ukrainian forces are retaking lost territory in the Kherson region. This implies the conflict will continue to expand, boding cynically well for AeroVironment.
Lockheed Martin (LMT)
Source: Ken Wolter / Shutterstock.comOn the other end of the defense contractor scale, we have Lockheed Martin (NYSE:LMT). Even folks that lack familiarity with this market segment will recognize the name. Arguably, Lockheed represents the single most important company in Ukraine’s battle for independence against Russian aggressors. Possibly, without Lockheed’s co-development of the Javelin anti-tank missile and the M142 High Mobility Artillery Rocket System (HIMARS) artillery solution, this war would look much different.
Almost immediately, the deployment of HIMARS represented a gamechanger for Ukrainian forces. Prior to the deployment, the Russian military pounded Ukrainian positions without care for civilian casualties. Now that Ukraine has longer-range artillery solutions, it gave Russia a taste of its own medicine. Other nations took notice, with Lockheed reporting increased demand for HIMARS. Fundamentally, then, LMT is one of the stocks to buy this week.
Stocks to Buy This Week: Cheniere Energy (LNG)
Source: IgorGolovniov / Shutterstock.comWhile I don’t want the narrative for stocks to buy this week to focus exclusively on Russia, the nation certainly changed the world. Unfortunately, it was the change that arguably most democracies did not want. However, in the emergence of Cold War 2.0, some companies enjoy cynically favorable tailwinds. One example would be natural gas specialist Cheniere Energy (NYSEMKT:LNG).
At a time when the most-celebrated securities of 2021 have been left gasping for air, LNG stock has gained 62% year-to-date (YTD). In contrast, the benchmark S&P 500 has slipped more than 25% during the same period. Fundamentally, Cheniere benefits from Russia cutting off natural gas outflows to Europe. In addition, news reports indicate that a yet unknown entity attacked the underlying Nord Stream pipelines.
For decades, Europe relied on Russia for its hydrocarbon supplies. Now, the region must turn to someone else.
Home Depot (HD)
Source: Northfoto / Shutterstock.comLet’s move away from Russia-related discussions and talk about matters close to home. As you probably know, Hurricane Ian imposed significant damage to many parts of our country. According to CNN, at time of writing, the death toll has tragically soared to 76. Now, if a silver lining exists, the best of humanity tends to come out during these troubles.
Moreover, Home Depot (NYSE:HD) represents a feel-good narrative in this matter. Historically, the company commits to remaining opening (so long as it’s safe to do so) through various disruptions. Most notably, Home Depot provided extended shopping hours during the initial onset of the coronavirus pandemic. That move undoubtedly eased the logistical and administrative hurdles that people faced when they had to shelter in place.
On a more cynical note, following certain weather-related disruptions, Home Depot’s earnings tend to rise. First, many residents buy mitigation-related products ahead of a storm. Later on, demand increases due to restoration efforts. Thus, from a relevancy perspective, HD is one of the stocks to buy this week.
Stocks to Buy This Week: Allstate (ALL)
Source: Jonathan Weiss / Shutterstock.comBroadly speaking, insurance giant Allstate (NYSE:ALL) represents an all-around important market idea for present circumstances. With the Fed raising the benchmark interest rate, investors should be looking at insurance firms all day, every day. Primarily, insurance companies provide indelible services. Therefore, people tend to pay up, irrespective of whatever’s going on in the market or economy.
Regarding recent developments, I speculate that more folks will look into enhancing their coverage. Sure, not everyone in the U.S. lives in the path of Hurricane Ian. However, natural disasters offer a harsh reminder that people need to cover their financial bases. Sometimes, stuff happens. And since a lot of stuff has happened throughout the new normal, it’s time to stock up on coverage.
As well, it’s one of the few public companies that has performed well so far this year. Of course, being up 5.3% YTD wouldn’t qualify as anything special last year. However, the monetary and economic paradigm shifted this year. Combined with the company’s reliable dividend yield of 2.68% — featuring 11 years of consecutive dividend increases — ALL offers a solid case for stocks to buy this week.
Archer Daniels Midland (ADM)
Source: Katherine Welles / Shutterstock.comWhen in doubt for stocks to buy this week, you probably can’t go wrong with Archer Daniels Midland (NYSE:ADM). A multinational food processing and commodities trading corporation, ADM essentially offers a permanently relevant business profile. At the most elemental level, humans must eat. Arguably, no amount of technological innovation will change this fact.
Economists will use a more educated term called inelastic demand. Per Investopedia, this concept “means that when the price goes up, consumers’ buying habits stay about the same, and when the price goes down, consumers’ buying habits also remain unchanged.” Of course, price fluctuations necessarily impact consumption behaviors. However, at the baseline, Archer Daniels Midland enjoys significant inelastic demand.
Along the same line, ADM offers a viable market idea, whether the economy incurs inflation or deflation. Again, whether we have higher prices from a hot economy or lower prices from a depressed economy, we must eat. This narrative makes ADM one of the stocks to buy this week.
Stocks to Buy This Week: Amerisafe (AMSF)
Source: Pavel Kapysh / Shutterstock.comIn many cases, publicly traded companies pontificate left and right about the various protocols and initiatives that they deliver. But amid the word salad, both investors and analysts remain stuck with the same basic question: what exactly do you do? Fortunately, insurance specialist Amerisafe (NASDAQ:AMSF) gets right to the point.
Per its website, Amerisafe specializes in workers’ compensation cases. That’s all it does. I, for one, appreciate this blunt simplicity.
Amerisafe targets small- to mid-sized employers tied to hazardous industries. Fundamentally, I anticipate greater demand for the company’s solutions in the years ahead. True, we operate in strange and arguably treacherous times. But that peril also means it’s more important than ever for companies to protect themselves financially.
According to the National Council on Compensation Insurance, the average cost for all types of worker comp cases in years 2019 through 2020 came out to $41,353. Obviously, the costs get much higher depending on the severity of injury. Again, with so much going on these days, Amerisafe may see increased demand. Therefore, AMSF is my final idea for stocks to buy this week.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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