November 11, 2011 | In: General
Stocks To Own in a Recession
I have traded many stocks throughout the years, and I have to realize that some stocks are just resilient to a recession. In no order of importance, here are these stocks:
- MCD: McDonald’s is the best stock for a recession. Think about it this way, when there is a recession, the middle class becomes poorer, which means that the middle class will no longer go to fancy restaurants during the lunch break, but rather have a quick bite at McDonald’s for a few dollars (and you don’t have to tip anyone there). MCD is even paying more dividends at the moment. Note: I have written about MCD before.
AAPL: Apple is a company that proved to be very resilient to the recession. The stock has quadrupled since it reached a bottom back in 2008, and it has tripled since 2007 (before even the recession hit the US). Imagine what will this stock do when the world gets out of the recession. Will it reach $1,000?
INTC: Intel is one of the most ignored, yet most powerful stocks out there. If you look at the 5 year chart, you can see that Intel is now trading at a price that is very close to the pre-recession level, which means that Intel is now a resilient stock. Intel’s future is bright and, unlike many listed companies, it is here to stay. INTC P/E ratio of 10 makes it very attractive, and makes INTC, at the current moment, an undervalued stock (see how to know if a stock is undervalued). Also keep in mind that Intel is buying back its shares from the market like crazy!
WMT: I have never traded Walmart before, but this is a very solid stock. Walmart has the same important characteristic as McDonald’s, it is a place where the middle class would go to when they become poorer to buy clothes and other consumer products. Walmart has no unions whatsoever in the US, which makes it invulnerable to be blackmailed by the unions.
PFE: Pfizer is one of the most important pharmaceutical company out there. People will always need Pfizer products (Pfizer produces the most important drugs on this planet). Pfizer was briefly affected by the recession, but it has now regained its pre-recession price.
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