3 no-brainer stocks to buy with $200 during the market sell-off

It’s been a tough start to the year for Wall Street and the investment community. Both the iconic Dow Jones Industrial Average and reference S&P500 are officially in correction territory (down at least 10% from recent highs). Meanwhile, tech addicts Nasdaq Compound pushed more than 20% lower from its all-time high. This puts the index in a bear market.

While the speed of market declines can be frightening at times, history has shown time and time again that stock market crashes and corrections are the perfect time to put your money to work. Indeed, every correction in history was eventually erased by a bullish rally.

Even better, with most online brokers eliminating commissions and minimum deposit requirements, any amount of money – even $200 – is the ideal amount to invest when the market corrects lower.

Image source: Getty Images.

If you have $200 ready to invest that won’t be needed to pay bills or cover emergencies, the next three actions are obvious buys during the market sell-off.

western digital

The top beat stock to buy first in this sale is the data storage solution provider western digital (WDC -2.47% ).

Anyone who has followed Western Digital for any reasonable amount of time knows that it is highly cyclical (meaning it depends on the growth of the US and global economy to thrive). They are also likely aware that Western Digital and its peers have a way of sabotaging themselves by supplying the market with data storage solutions when prices improve.

Although this has been a very real concern for a long time, the COVID-19 pandemic has had a negative impact on supply chains globally. For Western Digital, that means no chance of oversupplying the market and significantly stronger pricing power through fiscal year 2022 and likely 2023.

In terms of growth drivers, Western Digital has a number of short-term and long-term catalysts. Over the next year or so, the company will continue to benefit from the residual growth in sales related to the gaming industry. Next-generation game consoles require hardened storage solutions. With COVID-19 weighing on the holiday shopping season for the past two years, there remains strong demand for new game consoles.

There is also strong short-term demand and long-term opportunities for data centers. With businesses moving their data to the cloud at a faster rate than ever, the demand for hard drives in data centers is expected to increase. In the long term, Western Digital’s NAND flash memory solutions could become the standard in data centers.

Western Digital’s opportunity also extends to the automotive industry. As next-generation vehicles become increasingly dependent on technology, Western Digital will rely even more on it to provide ideal solutions for these connected automotive systems.

With shares of the company valued at just five times Wall Street’s estimated earnings for fiscal year 2023, now seems a great time to buy.

A close up view of a flowering cannabis plant on an indoor commercial grow farm.

Image source: Getty Images.

Cresco Laboratories

A second easy stock to buy with $200 during the market sell-off is the marijuana stock. Cresco Laboratories (CRLBF 0.00% ).

To be blunt (and use a terrible pun while doing so), pot stocks have been buzzing since February 2021. A Democratic-led Congress was expected to pass cannabis reforms quickly the last year. But these reforms did not materialize and Wall Street showed its displeasure.

However, federal legalization isn’t necessary for marijuana stocks like Cresco Labs to succeed. While legalization would eliminate some operational inefficiencies, 37 states have, so far, given the green light to cannabis in some capacity. That’s more than enough states for multistate operators (OSMs) to be successful.

What makes Cresco Labs so intriguing is the company’s dual growth approach. First, like most MSOs, the company has a thriving commercial presence. The next dispensary Cresco will open will be its 50th.

Although it has a growing presence in Florida – 16 of those 50 dispensaries will be located in the Sunshine State for marijuana forensics – Cresco has focused much of its attention on building its retail presence in the states to limited license. , such as Illinois, Ohio and Massachusetts. Limited licensing states cap total dispensary licensing, allowing Cresco to grow its brand(s) and build customer loyalty without being overrun by competition.

The secret sauce to Cresco’s success lies in the company’s wholesale operations. Wall Street analysts often heavily discount wholesale cannabis due to its lower margins compared to the retail side of the equation. But Cresco has significant volume on its side.

It holds one of the few cannabis distribution licenses in California, the world’s largest weed market by annual revenue. This license allows Cresco to place its exclusive potted products in more than 575 stores across the Golden State.

Cresco is expected to turn the corner of recurring profitability this year, making it the perfect time to recoup this rapidly growing stock of pots.

A person interacting with the US Bank mobile app on their smartphone.

Image source: US bank.

American bank

The third obvious stock to buy with $200 as the market moves deeper into correction territory is regional banking giant American bank ( USB -2.79% ).

Shares of major banks around the world have been hit hard over the past two weeks due to uncertainty surrounding the Russian-Ukrainian conflict, as well as rapidly rising inflation. The concern with the latter is that higher prices will push the national or global economy into a recession, leading to increased credit/loan defaults. While these may be tangible concerns for the banking industry as a whole, US Bancorp shareholders shouldn’t worry.

One of the most important things to understand about US Bancorp’s management team is that they are generally conservative. As currency center banks found themselves struggling during the financial crisis by making riskier derivative bets, US Bancorp kept its head down and focused on the bread and butter of banking, that is- i.e. the growth of its loans and deposits. A high-quality loan portfolio has helped the company rebound quickly from economic downturns.

To capitalize on this point, investors need to understand that banks are cyclical – and that’s a good thing. Although recessions are an inevitable part of the business cycle, periods of economic expansion last much longer than recessions. This is a fanciful way of saying that banks benefit in the long run from the steady growth of the US economy.

What really sets US Bancorp apart is its ability to encourage customers to bank digitally. By the end of November, 80% of the company’s total active customers were banking online or through a mobile app. Additionally, 66% of all loan sales were made digitally, representing a 21 percentage point increase from the start of 2020. Digital transactions are far more profitable than face-to-face or phone interactions.

Offering one of the highest asset yields among major bank stocks, US Bancorp ticks all the right boxes to be a no-brainer buy.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging 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 wealthier.

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