The market dip in May has a lot of investors worried about the short-term outlook for the market, but overall economic conditions in the U.S. remain favorable and once trade tensions ease between the U.S. and China the bulls should quickly return to the overall market.
Trade concerns drove the market lower in May, but the pullback in the market has created some good buying opportunities in stocks that were in strong upward trends before the overall market pulled back.
Even with the recent dip in the market 2019 has been a good year for investors. The Dow Jones is up 9.4% year to date, but ongoing trade fears, slowing global growth, and geopolitical uncertainties all pose a threat for the second half of the year. Economic conditions remain favorable enough to keep us in the market, but the market’s recent pullback illustrates that now is a time to be extra careful where you put your money to work.
Taking all things into consideration, here are a few stocks that are screaming buys at this time.
Under Armour (UAA)
Athletic goods and apparel maker Under Armour (UAA) has been a strong outperformer in 2019 with shares up 42% year to date. Under Armour has shown decent growth in recent years with profits up 16% per annum over the last five years, but analysts see even stronger growth moving forward with profits expected to rise 38% annually over the next five years. While the broader market has sold off over the last month, UAA is now trading just shy of its 52-week high. The company delivered positive top and bottom line surprises last quarter for the third-straight quarter and Wall Street remains bullish on the stock. Research firm JP Morgan recently took a very bullish stance on the stock with a $29 price target. UAA is currently trading at $25.12.
Walt Disney (DIS)
It is no secret that Walt Disney’s (DIS) ESPN network has been losing subscribers, but the company’s movie studio and amusement parks have been strong and the company has managed to grow profits 10.3% per annum over the last five years even as ESPN numbers have been falling. After rising to an all-time high in April, DIS shares have pulled back with the overall market over the last month which has created a good buying opportunity. DIS stock trades at just 15 times earnings which creates a lot of value in the stock given the company’s expected earnings growth. The company posted better than expected earnings and sales in early May with a big sales beat. Analysts see additional upside in the stock with an average price target of $147.64 with the stock trading at $135.43.
Tech titan Amazon.com (AMZN) has delivered tremendous earnings growth of 103% annually over the last five years, and analysts expect more of the same with profits expected to rise an additional 94% per annum over the next five years. Amazon is the clear leader in e-commernce and the company has also become a leader in the fast growing cloud computing market. AMZN pulled back in May with the overall market, and the stock is currently trading at 45 times future earnings. Wall Street has always been willing to buy into AMZN stock at a high valuation given the company’s strong earnings growth, and if Amazon is able to deliver annual earnings growth of 94% moving forward the stock has a lot of upside potential. Analysts have set an average price target of $2,198.89 with the stock trading at just $1,734.36.
Johnson & Johnson (JNJ)
Johnson & Johnson (JNJ) is a diversified healthcare company with business segments in consumer goods, pharmaceuticals, and medical devices. The company’s diverse businesses provides protection against downturns in any one of its sectors, and earnings have risen 7.7% per annum over the last five years and are expected to rise an additional 6.5% annually the next five years. The stock is a very good value with a forward P/E of 14.7 and the company posted big positive Q1 surprises on the top and bottom line in mid-April. The stock pulled back with the overall market in May and created a good buying opportunity for investors wanting to pick up shares are a discount. JNJ is currently trading at $134.95 with an average price target of $147.15.