Yes, the markets are marching back from their bone-rattling drop, but don’t think that everything is “back to normal.” There’s a new normal in town now. The U.S. has a new board chair of the Federal Reserve and the era of quantitative easing is over. And it’s not just over in the U.S., the past decade of central bank-controlled easy money and low rates is winding down all over the globe. It’s more vital than ever to find safe stocks to buy.
We had never seen central bank intervention like we have in the past decade, and now we’re entering a new phase of the unknown – getting the domestic and global economies back in play on the free market side.
The balancing act is still real. Too much inflation will overheat the economy and the dollar will not just weaken, but collapse, sending stocks tumbling. Too-little rate rising may end up choking off expansion and bring us back into recession. And after all this QE, there’s little the central banks could do to help.
Regardless of what happens, having some solid growth stocks will keep you cool if things overheat again.
Nike Inc (NYSE:NKE) is coming under some pressure from competitors like German sports firms Adidas and Puma. It also saw the last throes of its shoe retailers’ demise as online retailing starts to kill middlemen, which hurts keep the brand in front of potential consumers.
NKE is at a pivot point now and needs to makes some tactical changes in 2018 to keep its might in the global sports world.
Certainly, the Olympics help, since Nike is sponsoring the US teams clothing. And the weakening dollar will also help international sales sectors look better. And remember, with a market cap of $111 billion, it’s 3x larger than its nearest direct competitor and has demonstrated its resilience in transitional markets many times over.
And it’s a great long-term growth stock in times of turmoil.
Safe Stocks to Buy Today: Electronic Arts Inc (EA)
Electronic Arts Inc (NASDAQ:EA) is one of the biggest video game makers in the world. It makes franchises with FIFA, Madden NFL, Battlefield, The Sims and Need for Speed.
This last quarter’s earnings were not stunning, but earnings came in ahead of analysts’ expectations. And EA has plenty of launches this year that will keep the revenue rolling.
So far in 2018, EA stock is up 20%, and it was a strong performer when the markets sold off. That’s a good sign that it is seen as a safe harbor stock when volatility increases.
Also, mobile gaming growth is expected nearly double between 2016 and 2020, according to Statista.
Safe Stocks to Buy Today: Sony (SNE)
Sony Corp (ADR) (NYSE:SNE) was the best in class technology in the 1970s through the 1990s. Then, Apple Inc (NASDAQ: AAPL) came along and changed the game.
SNE’s Trinitron televisions, and Walkman tape and the CD players were all the rage until the iPod hit the scene.
Since then, SNE has been a steady, diversified technology company, but an entire generation of consumers have considered it nothing more than another brand that for some reason charges a premium for its products.
But that is changing. Its PlayStation video game division is finally differentiating itself from competitors. And it other division it’s recommitting to being a world-class, innovative consumer electronics brand again.
Plus, it has the staying power and the R&D to make it happen.
Safe Stocks to Buy Today: Netflix (NFLX)
Netflix Inc (NASDAQ:NFLX) is a juggernaut. Yes, it has a PE that’s over 200. But year to date, the stock is up 45% – including the 1000-plus point down week we just had. And in the past 12 months, NFLX stock is up nearly 100.
That’s pretty impressive for company with a market cap of $120 billion.
And the thing is, NFLX is still growing and becoming stronger.
Remember, there is no one in this space that is trying to compete with NFLX. There are plenty of content firms that want to grab some of its market share, but no one has committed to building original content for viewers around the world like NFLX.
What’s more, NFLX has always been a streaming service, so it doesn’t have legacy contracts with cable providers that can weigh growth and margins.
Safe Stocks to Buy Today: Diageo (DEO)
Diageo plc (ADR) (NYSE:DEO) is a spirits company that is twice as big by market cap as its closest competition.
Crown Royal, Ciroc, Smirnoff, Bailey’s, Ketel One, Guinness, Tanqueray, Captain Morgan, Bulleit, are just a few of the brands that are in the DEO stable.
When the markets get bouncy and the economy starts to undergo a transition like the one we’re experiencing now, it is usually cause for celebration as well as trepidation.
Either way, ‘sin’ stocks are at their best in these times, because either way people searching out a drink.
DEO stock had a solid 12 months, and got hit in the selloff a bit. But it’s regained most of its loss and is set for a strong 2018.
Safe Stocks to Buy Today: Lifetime (LCUT)
Lifetime Brands Inc (NASDAQ:LCUT) designs and manufactures kitchenware and tableware for more than 30 name brand companies, including Faberware, Kitchen Aid, Mikasa, Pfaltzgraff, Mossy Oak and Gorham.
This is a smaller stock, with a market cap of around $235 million. But it’s one of the bigger players in this niche space. LCUT has done a very good job finding brands in growth sectors that competitors have yet see. For example, its Mossy Oak line is geared for the tools, tableware and accessories that outdoor and hunting enthusiasts would find attractive.
That market isn’t typically served by companies like LCUT. And as the economy expands, more consumers will be interested in buying more name brand products as well as replacing aging equipment they have been nursing for a while.
Safe Stocks to Buy Today: Hooker Furniture (HOFT)
Hooker Furniture Corporation (NASDAQ:HOFT) was founded in 1925 by Clyde Hooker. And after his father retired, Clyde Hooker Jr took over the furniture making firm out of Martinsville, VA.
In 2000, Clyde Jr handed the reigns to Paul Toms Jr, the grandson of the original owner. In most industries, keeping a company in the family isn’t always the best way to go. But when you’re legacy is making furniture, it’s a different thing entirely.
Even when your company has a $435 million market cap.
As rates rise, housing prices will rise as inventory decreases. But banks have already started pushing home equity loans and home equity lines of credit. And upgrading furniture is always one of the more popular ways to spend.
Safe Stocks to Buy Today: Insperity Inc (NSP)
Insperity Inc (NYSE:NSP) is the next wave in human resources solutions. And it has been leading this wave since 1986, when it was founded.
The idea was simple. Business owners were good at building a business. And their core competencies were usually focused on the products or services that they sold.
But as their businesses became bigger, human resources – hiring, benefits, training, bookkeeping, payroll, etc – also became bigger and more important. The problem is, HR is usually a completely different world from what most business are engaged in.
NSP saw the opportunity in outsourcing. And now it serves over 100,000 businesses with more than 2 million employees across the US.
Now, businesses looking to run lean are seeking out NSP and similar firms with regularity.
And if you need proof it’s a safe choice in a choppy market, NSP stock is up almost 20% off its February 9 lows.
Safe Stocks to Buy Today: TransUnion (TRU)
TransUnion (NYSE:TRU) is one of the hottest financial sectors in the market today. Now that doesn’t mean it’s sexy but demand is expanding, and should for a long time to come.
TRU provides consumer credit reports, risk scores and analytical services. Since the financial meltdown in 2008, credit scores have become the be all and end all of the financial services market. And TRU is one of the biggest players.
Now that the markets are becoming more dynamic and the economy is growing, more people will be looking for housing, transportation and credit cards to leverage their newfound money.
TRU gets a piece of each one of those requests. And consumers are now obsessed with their credit scores, so subscription services are up on the consumer side as well.
On February 14, TRU reported earnings that beat analysts’ estimates and it’s very bullish for 2018 and beyond.
Safe Stocks to Buy Today: Bright Horizons (BFAM)
Bright Horizons Family Solutions Inc (NASDAQ:BFAM) is a full-service child care provider with over 1000 locations in the U.S., U.K. and Holland.
Through its size and reach it has been able to exploit important niches that local child care providers would be strained to explore. For example, BFAM set up a facility for hospital workers’ children that they could come to if they are mildly sick so the parents don’t have to stay home with the child and the child can be taken care of and also taught away from healthy classmates.
This kind of innovation is at the core of BFAM’s strategy. And these services are already very popular in Europe, so translating them cost-effectively into the US market means more efficiencies.
BFAM stock is up nearly 40% in the past 12 months and as long as the economy continues to grow, so will its fortunes.
