Bear markets can be challenging processes for investors. However, the one upside is that they give an opportunity to buy high-quality companies at very attractive prices.
Although it’s still early in the bear market, and odds favor another leg lower as we are nowhere close to a Fed ‘pivot’ and the economy has only just started to deteriorate, it’s a good time for investors to start building their list of companies to accumulate. Some key characteristics to prioritize are a wide moat around its business, exposure to a powerful, secular trend, and a reasonable valuation.
Here are 3 high-quality stocks worth accumulating right now:
One commonality of the bull market winners of the past is that it was connected to secular growth themes. Another area of secular growth is homeschooling which is becoming increasingly popular due to a variety of political and unpolitical reasons. There is also chatter that vouchers could be used for homeschooling purposes.
LRN is probably the only stock that is connected to this theme as it offers an online platform for education, including hosting third-party material. Currently, about 2 million students are using Stride’s platform in one way or the other. Stride is also looking to bolster its product lineup by offering more career education services and also more third-party material.
Stride is positioned as the leading company for anyone who is pursuing an education on their own initiative. This is going to be a promising are of growth especially considering the egregious cost of a college education. And, Stride will get another tailwind from the increasing odds of Republicans winning control of Congress in 2022.
The POWR Ratings are also bullish on LRN as it’s rated a B which translates to a Buy. B-rated stocks have posted an average annual performance of 21.1% which compares favorably to the S&P 500’s annual average gain of 8.0%. Click here to see more of LRN’s POWR Ratings.
Donnelley Financial (DFIN)
DFIN was a spin-off from R.R. Donnelley and Sons (RRD) and is now worth more than its parent company. DFIN is a global risk and compliance solutions provider. It creates software that helps companies meet financial regulatory requirements in the US and abroad. Thus, DFIN’s products help reduce the cost and complexity that companies face when dealing with financial regulation.
DFIN is a great example of a stock with a wide moat as companies are likely to keep using their software once they start given switching costs and the value proposition. Additionally, this contributes to its software’s capabilities which makes it more attractive and effective. Overall, it’s one of the cheapest stocks in the market with a P/E ratio of 9.8 and a P/FCF of 8.9.
Given these strong fundamentals, it’s not surprising that the stock is rated a B by the POWR Ratings, equating to a Buy. B-rated stocks have posted an annual performance of 19.7%, comparing favorably to the S&P 500’s 7.1% annual performance.
DFIN also has a B for Growth. This is consistent with the company’s strong earnings report and also analysts hiking full year EPS estimates from $2 earlier this year to nearly $4.2 following the recent report. To see additional component grades for DFIN, click here.
EXPE is one of the largest online booking companies in the world. It operates through multiple segments including Expedia, Vrbo, Hotels.com, Orbitz, Travelocity, and Wotif. In addition, it offers a range of travel and non-travel verticals, including for corporate travel management, airlines, travel agents, online retailers, and financial institutions.
Like many travel stocks, EXPE is seeing a huge surge in revenues and bookings due to people’s pent-up demand for travel. However, the stock price has languished due to the market’s concern of a slowdown and potential recession.
Thus, EXPE’s stock is down more than 50% from its all-time high in February of this year. Despite this, the stock’s earnings outlook remains strong. This year, analysts expect the company to earn $7 per share which will climb to $9 per share in 2023.
This combination of growth and value makes the stock quite attractive. It’s a major reason why EXPE is rated a B which equates to a Buy rating. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree. B-rated stocks have posted an average annual performance of 21.1% which compares favorably to the S&P 500’s average annual 8.0% gain.
Click here to see EXPE’s complete POWR Ratings.
What makes them “MUST OWN“?
All 9 picks have strong fundamentals and are experiencing tremendous momentum. They also contain a winning blend of growth and value attributes that generates a catalyst for serious outperformance.
Even more important, each recently earned a Buy rating from our coveted POWR Ratings system where the A rated stocks have gained +31.10% a year.
Click below now to see these top performing stocks with exciting growth prospects:
Want More Great Investing Ideas?
EXPE shares were unchanged in after-hours trading Wednesday. Year-to-date, EXPE has declined -46.45%, versus a -18.64% rise in the benchmark S&P 500 index during the same period.
About the Author: Jaimini Desai
Jaimini Desai has been a financial writer and reporter for nearly a decade. His goal is to help readers identify risks and opportunities in the markets. He is the Chief Growth Strategist for StockNews.com and the editor of the POWR Growth and POWR Stocks Under $10 newsletters. Learn more about Jaimini’s background, along with links to his most recent articles. More...
More Resources for the Stocks in this Article
|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|EXPE||Get Rating||Get Rating||Get Rating|
|DFIN||Get Rating||Get Rating||Get Rating|
|LRN||Get Rating||Get Rating||Get Rating|