With everything on sale right now in the stock market, it is no surprise that many people are looking for good deals. Indeed, if you pay attention to fundamentals, there is a good chance that you can buy into some bargain stocks that will take off when the recession ends and the stock market starts rising again.
But what if you want to make money in the stock market now?
There are some stocks that are benefitting from the recession. These are stocks of companies that offer discount products and services, or that provide consumer staples that the majority of people view as necessities. Here are three stocks that are benefiting from the recession — allowing you the chance to make money now:
- Netflix (NFLX) has been enjoying an increase in profits (and stock price) since the recession has driven many to stay in for their entertainment, rather than go out and spend $50 or more on a night on the town. Netflix is introducing a box that allows subscribers to get movies immediately for their TV. Customers can already watch movies on their computers, and DVDs (and Blu-Ray discs) are delivered to homes via mail. It is cheaper than renting from many stores, and more convenient as well.
- General Mills (GIS) is benefitting from the trend that has many people staying home to cool meals. General Mills owns the Betty Crocker brand. While true frugalistas avoid prepackaged dinners, for those who formerly ate out more, these types of products are appealing because they still save money and result in something like a home cooked meal. A Betty Crocker meal for $7 and a Netflix movie for $1.24 (assuming the low $4.99 month rate for one disc at a time, and assuming you get one movie a week) means dinner and a movie for $8.24. A definite improvement.
- Family Dollar Stores (FDO) provides low, low prices on a number of items. Shoppers looking for consumer staples and more can get them for much less at Family Dollar, and that is propelling profits higher.
Of course, the question is whether or not these companies can maintain their growth after the recession ends. What happens when people start feeling more comfortable spending money again? It’s not very likely that they will continue shopping at Family Dollar, or that they will be as interested in staying at home. General Mills might get a post-recession boost as families feel comfortable buying expensive cereals again, and Netflix may maintain its subscribers as long as it continues to adapt to the changing demands of the marketplace.
What stocks do you like for recession investing?
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
Image source: BlueMint via Wikipedia