3 Discounted Stocks for a Volatile Market

Wow! I have to say, I do love volatility (as it often produces great stock bargains), but I admit, I’m getting tennis neck from all the ups and downs!

But the good news is, the kind of market we are now experiencing is due to basically one factor—the war with Iran—which is (hopefully!) temporary.

That means that investors—if you’ll pardon the cliché—are “throwing out the baby with the bath water,” selling many good companies that just happen to be in the same sectors that aren’t currently in favor.

Here’s a lineup of where the sectors stand as of Thursday, April 2.

U.S. Sector Performance

You can see that Energy and defensive sectors are in favor, but many other fundamentally strong sectors are suffering, due to no fault of their own. And that means, right now is an opportunity to “buy low, and sell high” at a later date.

This opportunity doesn’t often come around. Usually, when we have such market volatility, it’s because the economy is in the doldrums (such as a recession) or there’s been some anomaly like the tech boom and subsequent bust of the late 1990s and early 2000s—both scenarios that cause investors to flee with their cash, in fear of how long the rout will continue.

This scenario is different. Sure, it may be a few more months, but chances are the war will come to some sort of conclusion, and we will be back to business as usual.

In the meantime, the volatile market offers you the ability to buy into quality companies at bargain prices. You might also want to add to some of your discounted positions through dollar-cost averaging, which simply means investing at regular intervals. Right now, you have the ability to invest while prices are low and even when you later invest at higher prices, your average cost may be lower over a long period of time.

Of course, you’ll want to target your investments toward companies that:

• Are fundamentally strong, meaning revenues and earnings are growing
• Trading at a discount to their historical P/Es
• Have long-term growth potential

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There are a few caveats with this market:

I caution you, do not try to time the market. Instead, invest for a period of time, as you’ll never guess the exact bottom of a market. If you try to do that, you will most likely miss out on the best rebound days, and that will affect your long-term gains.

Additionally, please understand that volatility carries risk, and we may not yet be at the bottom of the market. But know that it is temporary and be confident that investing in the right companies will create long-term wealth.

Remember to diversify. Your risk is substantially increased when your portfolio is balanced by industry, company size, and a variety of investments.

With that in mind, here are three stocks that are currently trading at a discount that have recently seen some upward momentum in their shares.

3 Discounted Stocks with Momentum

AT&T Inc. provides telecommunications and technology services worldwide. It operates through two segments, Communications and Latin America. As one of the market’s oldest businesses (founded in 1885), AT&T has an excellent track record of rewarding its investors. The company’s earnings have exceeded analysts’ estimates two out of the last four quarters.

AdaptHealth Corp. distributes home medical equipment (HME), medical supplies, and home and related services in the United States. It operates through Sleep Health, Respiratory Health, Diabetes Health, and Wellness at Home segments. Recently, institutions have been piling up shares in AHCO, and earnings estimates for the company have been rising.

Transocean Inc. provides offshore contract drilling services for oil and gas wells in Switzerland and internationally. The company has just been awarded $1 billion in new contracts, and two of its covering analysts have recently boosted their earnings estimates for RIG.

Happy investing!

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