7 Top Stocks to Buy When the Stock Market Crashes – Motley Fool

Amazon
Simply in case you thought Amazons (NASDAQ: AMZN) $1.4 trillion market cap indicated its high-growth days are in the rearview mirror, believe once again. Amazon stays the kingpin of the e-commerce area, with approximately 40% of all U.S. e-commerce market share. Theres little concern that itll continue to wield its power in the online retail world and via its Prime subscription to keep customers devoted and within its sphere of product or services.
But over the long run, the Amazon growth story is everything about its cloud facilities services. Amazon Web Services (AWS) is growing at two times the rate of Amazons core retail section but includes substantially higher margins. With more than $200 per share in operating capital forecasted by Wall Street in 2023 (thats a near-tripling from 2019), Amazon has a shot to clear $5,000 a share with ease, based on its historical multiple to its operating cash flow.

Over the last four-plus months, Wall Street and investors have been handled a historical trip. Panic and uncertainty connected with the coronavirus illness 2019 (COVID-19) initially sent out the widely followed S&P 500 lower by a tremendous 34% in just 33 calendar days. Thats the fastest and steepest descent into bearishness area in history.
Nevertheless, over the following 11 weeks, the benchmark S&P 500 restored more than 80% of its losses, with the technology-focused Nasdaq Composite galloping to new highs. And mind you, all of this has actually occurred with the joblessness rate at highs not seen given that the Great Depression and COVID-19 cases ticking greater in a number of U.S. states.
While the stock market has historically bottomed out well before the U.S. economy found its trough, there are a number of factors to believe that the existing rally may yield and fizzle to yet another crash. Even if it doesnt, stock exchange crashes are an inescapable occurrence in the investing cycle. When the next one does happen, utilize the fear and panic-selling to your benefit by buying the following 7 leading stocks at a discount.

Image source: Getty Images.

Image source: Square

Image source: Getty Images.

Square.
A lot of folks understand Square (NYSE: SQ) for its point-of-sale platform. For many years, Square built its seller community by forging relationships with small- and medium-sized services. Though these smaller sized businesses stay, Squares platform has actually ended up being considerably more appealing to larger companies. Based upon annualized gross payment volume, more industries are using Squares seller ecosystem than ever before, which isnt a bad thing in a consumption-driven economy.
The capability to move funds to and from standard bank accounts, invest straight from the app, and link Cash App to Cash Card for use as a debit card, has actually caused Cash Apps gross profits to skyrocket. When the market crashes again, youll want Square on your buy list.

Image source: Getty Images.

Image source: Getty Images.

Pinterest.
Miss your opportunity to purchase into the Facebook development story in the early innings? Have no worry, since Pinterest (NYSE: PINS) is giving investors a possibility at redemption. Pinterests 367 million regular monthly active users (MAU) pale in contrast to Facebooks 2.6 billion, whats really remarkable about Pinterest is the MAU development its generating from overseas users. Last year, global average revenue per user more than doubled and will likely do so a number of extra times this years.
Pinterests nascent e-commerce platform might also bloom into a major development story. Because Pinterests platform is developed around sharing interests, its just logical for the business to monetize its platform by allowing medium-sized and small businesses to engage with potentially targeted consumers. In between ads and e-commerce, a continual double-digit development rate is possible for a very long time to come.

Kirkland Lake Gold
Tech stocks are all the rage right now, do not neglect the gold-mining industry, or more particularly, Kirkland Lake Gold (NYSE: KL), which is benefiting from macro and company-specific catalysts.
On a macro level, international bond yields have actually plunged and main banks are pumping copious amounts of cash into their monetary systems. Simply put, panic and worry have made it virtually difficult for earnings hunters to make much in the method of “safe” cash. As long as yields stay near historical lows, physical gold will be deemed a highly appealing shop of worth.
On a company-specific basis, Kirkland Lake Gold has the most beautiful balance sheet in the entire industry– $531 million in money and no financial obligation– and tape-recorded an all-in sustaining expense of $776 per gold ounce in the very first quarter. Based on current spot costs, Kirkland Lake is generating nearly $1,000 an ounce in money operating margin. As an added benefit, the company doubled its dividend and redeemed nearly $330 million worth of stock in the very first quarter..

U.S. Bancorp
. The highly cyclical banking market is probably not where most financiers would think to put their money to work when the stock market crashes, U.S. Bancorps (NYSE: USB) long-lasting performance will make a follower out of even the most skeptical financiers. You see, U.S. Bancorp has prevented the risky investments that got big banks into problem more than a years back, which has played a huge role in it consistently producing the greatest return on possessions among the biggest U.S. banks by market cap.
U.S. Bancorp has actually also taken advantage of the consistent transition of consumers to digital banking and mobile apps. This has actually allowed the company to close branches to decrease its noninterest costs, which, in turn, has assisted its bottom line broaden. U.S. Bancorp is currently at its least expensive evaluation in a decade in regards to price-to-book value, and it has a strong track record of returning a lot of capital to investors by means of dividends and share buybacks.

Palo Alto Networks.
When the stock market crashes, look to the cybersecurity industry and a company like Palo Alto Networks (NYSE: PANW) to be your rock. Eventually, no matter how well or badly the economy is carrying out, cybersecurity is a needed service. Specifically now, with more people working from house due to COVID-19 concerns, the need to safeguard business clouds is higher than ever.
What makes Palo Alto Networks so intriguing is the companys ongoing improvement to a subscription-focused service. By lessening its reliance on firewall software items, which can have lumpy revenue acknowledgment, and focusing on high-margin subscription and service earnings, Palo Alto will see a noticeable increase in its operating margins in time. The near term could be a bit rough as the company reinvests greatly in development and add-on acquisitions, the end result will be a bigger share of the business cloud protection-solutions market.

Instinctive Surgical.
When the stock market crashes, health care stocks are usually a pretty safe location to park your money. Thats why you require to have surgical system developer Intuitive Surgical (NASDAQ: ISRG) on your buy list. Instinctive has actually installed close to 5,700 of its da Vinci systems worldwide over the past 20 years, which is even more than all of its rivals combined. This implies it hardly ever needs to issue itself with customer churn.
As Ive noted previously, the best thing about Intuitive Surgical is that its margins are constructed to improve over time. Designed after the razor-and-blades business design, Intuitive Surgicals da Vinci system is costly ($ 0.5 million to $2.5 million), however its also costly to build, consequently producing just typical margins.

While the stock market has traditionally bottomed out well before the U.S. economy found its trough, there are a number of factors to think that the existing rally may yield and fizzle to yet another crash. When the stock market crashes, healthcare stocks are typically a pretty safe location to park your cash. The extremely cyclical banking industry is probably not where most investors would believe to put their money to work when the stock market crashes, U.S. Bancorps (NYSE: USB) long-term efficiency will make a believer out of even the most hesitant investors. You see, U.S. Bancorp has actually prevented the dangerous investments that got big banks into problem more than a decade back, which has played a big role in it consistently producing the highest return on possessions amongst the most significant U.S. banks by market cap.
When the stock market crashes, look to the cybersecurity industry and a company like Palo Alto Networks (NYSE: PANW) to be your rock.

Image source: Getty Images.

Image source: Getty Images.