A chief equity strategist and stock market expert shared the top three companies to invest in and what sets them apart from the rest.
Robert Doll revealed that his favorite stocks are Cigna (CI), American Express (AXP) and Lowe’s (LOW), he said. The Kansas City star.
In a “momentum-driven” economy, Doll relies on these companies for several reasons, including short- and long-term gains for investors.
Health care and insurance company Cigna “has great fundamentals at a cheaper price,” Doll told the outlet. He also explained that the stock’s price-earnings ratio is at a more than 30 percent discount to the market.
Robert Doll spoke on Bloomberg Television. The stock market expert revealed the three best stocks to invest in
Stock market numbers displayed on the New York Stock Exchange (file image)
Cigna’s annual growth projection is 10 percent, based on its dividends and earnings.
The advantage of investing in credit card company American Express is its “affluent customer base” compared to its competitors, Doll said.
He explained that increased membership and usage is associated with increased net interest income.
Doll told the Kansas City Star: “Therefore, it should face fewer problems in an economic crisis.” It is selling at a (high) valuation of 20 times earnings.
“So hold your nose and buy.”
Doll recommended health care and insurance company Cigna as one of the best stocks to invest in
Lowe’s is the second largest home improvement company in the United States, after Home Depot. But Doll suggests people invest in Lowe’s because “it’s made good profits.”
Home Depot makes higher profits overall, but Lowe’s is closing its profit gap and making improvements to its business. Doll basically said the company’s finances are in good shape.
The only drawback Doll pointed out was Cigna. He said the “main risk” is that the stock’s cost-to-income ratio is slowly rising.
Doll also offered general advice on the types of stocks people should consider, as well as what he believes the future of the stock market holds.
Credit card company American Express has a “wealthy customer base,” according to Doll
He told the Kansas City Star: “Predicting the end is a fool’s game, impossible.”
‘The bears say the economy is weakening and profit estimates are too high. They say consumption is slowing, as evidenced by falling confidence and rising debt.
“I’m cautious, although I’m not a bear.”
A ‘bear’ is an investor with negative outlooks on the stock market. Rapid declines are expected in the near future.
But Doll said he expects a 10 percent market correction in the coming months, which will cause stock prices to drop significantly.
Home improvement store Lowe’s is a good investment option because it is closing its profit gap, Doll said.
The carefully optimistic investor prefers financial stocks because “they are cheap relative to their history” and during this part of the stock cycle, they are in “better shape” than usual.
The stock market is currently in the ‘down’ or ‘decline’ stage of its cycle, depending on Funds for the entire season.
Doll emphasized that it is more important to focus on high returns and predictability than on the specific sector someone is investing in.
