Everyone has heard the mantra “buy low, sell high.” For some reason, though, many investors have a difficult time buying stocks when they’re trading at lower prices.
We’re definitely seeing many stocks available for a lot cheaper than they’ve been in a while. Technically, the stock market isn’t in a correction right now, though. The definition of a stock market correction is when a major market index falls between 10% and 20%. The S&P 500 index is getting close to that 10% threshold but isn’t quite there yet.
Regardless, the market volatility has made many investors afraid when now is a great time to buy low. Here are three popular Robinhood stocks to buy in this (almost) stock market correction.
Microsoft (NASDAQ:MSFT) currently ranks in the top 10 most popular Robinhood stocks. The tech stock is down more than 10% from its all-time high. Even if the decline worsens, long-term investors should be perfectly fine buying Microsoft right now.
The company’s business is rock-solid. In its latest quarter, Microsoft’s total revenue jumped 20% year over year to $51.7 billion with profits soaring 21% to $18.8 billion. Each of its three business segments generated double-digit percentage sales growth.
Microsoft’s technology is a must-have for many businesses. As a case in point, CEO Satya Nadella said on the company’s recent earnings call that over 90% of Fortune 500 companies used Teams Phone in the quarter ending Dec. 31, 2021. Microsoft’s cloud services also continue to attract more customers, including several major corporations in the latest quarter.
Looking ahead, Microsoft should have a tremendous opportunity in the metaverse. The company is already seeing customers use its platforms for creating digital twins for smart factories and more.
With its pending acquisition of Activision Blizzard, Microsoft is bolstering its already significant presence in the gaming world. The deal will also, in Microsoft’s words, “provide building blocks for the metaverse.”
2. PayPal Holdings
PayPal Holdings (NASDAQ:PYPL) isn’t just in correction; it’s in a full-blown meltdown. The fintech stock has plunged close to 50% over the past six months. But PayPal remains in the top 100 most popular Robinhood stocks. At the current price, it should become even more popular.
Some investors might be concerned about the company’s slowing growth. However, this is primarily a factor of challenging year-over-year comparisons with the surge in online shopping in 2020 amid widespread COVID-19 lockdowns.
There’s still a lot to like about PayPal. Its self-named digital wallet is by far the most widely accepted, with 75% of the top 1,500 retailers in North America and Europe supporting it. The introduction of buy now, pay later programs and the increased use of QR codes for on-site purchases should drive adoption even higher.
Don’t overlook PayPal’s growth prospects with Venmo. Just this month, Amazon.com began allowing customers to purchase online using Venmo.
The shift from cash to digital payments is an unstoppable trend. PayPal reigns as the leader in making this transition possible. Investors probably won’t be able to buy the stock at such a bargain price for very much longer.
No pharma stock is more popular with Robinhood investors than Pfizer (NYSE:PFE). That makes sense considering the company’s huge success achieved with its COVID-19 vaccine Comirnaty.
But Comirnaty isn’t the only thing Pfizer has going for it. The big drugmaker has already secured deals with the U.S. government to supply its COVID-19 pill Paxlovid worth more than $10 billion. Pfizer will make even more money from Paxlovid with international sales.
The company’s strong prospects also extend beyond the COVID-19 arena. Pfizer markets blockbuster drugs targeting cancer, autoimmune diseases, and rare diseases as well. The acquisitions of Trillium and Arena will beef up Pfizer’s already impressive pipeline.
Pfizer’s shares trade at only 9.5 times expected earnings. That’s cheap compared to most stocks, even with the recent downturn. As icing on the cake, Pfizer also offers a dividend that yields north of 3%. Pfizer is unusual in that it provides something for growth, value, and income investors.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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