Got $300? 3 no-brainer stocks to buy as the market corrects lower

For two months, Wall Street and investors have received an alarm signal. A subtle reminder, if you will, that stocks can go down as well as up.

Until March 1, both growth-dependent stock Nasdaq Compound and widely followed S&P500 were respectively down double-digit percentages from their all-time highs. While market declines can be quick and sometimes frightening, they are historically the perfect time to grow your money, especially if your investment horizon is measured in years, not weeks or months.

The best thing about putting your money to work on Wall Street is that you don’t need Warren Buffett’s portfolio to build wealth. Any amount of money – even $300 – is the right amount to invest in your future.

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If you have $300 ready to invest, which won’t be needed to cover emergencies or pay bills, the following trio of obvious stocks would be perfect buys as the market corrects lower.

Walgreens Boot Alliance

Although all eyes have been on growth stocks over the past decade, the ongoing correction has shifted the focus back to value stocks. One of the most exciting, proven and defensive value stocks investors can put $300 into right now is the drugstore chain. Walgreens Boot Alliance (NASDAQ: WBA).

The advantage of most healthcare stocks is that their operating models are virtually insensitive to stock market fluctuations. Since we cannot control when we get sick or what illnesses we develop, there is a constant demand for pharmaceuticals, medical devices and healthcare services.

However, there was a small exception to this rule with Walgreens at the start of the pandemic. Since pharmacy inventory relies heavily on foot traffic, front-end sales and clinical revenue have fallen during lockdown periods. This is the perfect opportunity for bargain hunters to buy a business that has a rich history of making big bucks.

As a Walgreens Boots Alliance shareholder, I’m intrigued by the company’s multipoint turnaround strategy of cutting weight and investing in faster-growing initiatives. For example, Walgreens cut full-year operating expenses by more than $2 billion a year ahead of schedule. Despite these significant cost reductions, management has put considerable effort into digitization to boost its online and drive-thru pickup business. Even though online sales represent only a small percentage of total revenue, Walgreens wisely realizes that this is an area with potential for sustainable double-digit growth.

Walgreens has also opted for personalized services. He partnered with VillageMD and invested in VillageMD to open co-located full-service health clinics. The differentiator here being “full service”. Medically staffed clinics are expected to attract a wider range of patients, increasing the likelihood of repeat visits and driving demand for Walgreens pharmacy. By the middle of the decade, more than 600 of these clinics are expected to be open in more than 30 US markets.

Walgreens looks like an absolute steal at just nine times estimated earnings per share for fiscal year 2022.

A row of clear jars on a dispensary counter filled with unique strains of cannabis bud.

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Trulieve Cannabis

Another obvious stock just begging to be bought with $300 during this correction is Cannabis Multistate Operator (MSO). Trulieve Cannabis (OTC: TCNNF).

Before we dive into what makes Trulieve so great, let’s tackle the elephant in the room: the lack of congressional cannabis reform at the federal level. While reforms would certainly help marijuana stocks by improving their operational efficiency, federal legalization is not necessary for most MSOs to succeed. With 37 states having legalized weed to some extent, this is more than enough opportunity for a company like Trulieve Cannabis to rake the green.

What has made Trulieve such a unique pot stock is its approach to expansion. While most MSOs played their own version of hopscotch and planted their proverbial flags in legalized states across the United States, Trulieve focused most of its attention on legal Florida for medical marijuana. By 2024, Florida is expected to be one of the top three selling cannabis markets in the United States

Trulieve has approximately 160 operating dispensaries nationwide, 112 of which are located in the Sunshine State. The saturation of the Florida market has allowed the company to gobble up about half of the state’s dried flower and oil market share. Moreover, it has significantly reduced the company’s marketing costs, which has helped it generate a recurring profit for more than three years.

Trulieve Cannabis also made waves with the largest US cannabis acquisition in history last year. The purchase of Harvest Health & Recreation gave Trulieve a presence in the mid-Atlantic region of the country and, more importantly, provided it with the leading market share in Arizona. Arizona legalized recreational pot in November 2020 and began selling weed for adult use two months later. The Grand Canyon State could soon top $1 billion in annual pot sales.

Given its recurring profitability, sustained double-digit growth rate, and estimated price-to-earnings ratio of just over 22 for 2022 on Wall Street, Trulieve ticks all the right boxes for opportunistic investors.

A smiling person holding a credit card near his face.

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Visa

The Third Payment Processing Giant Visa (NYSE:V).

Perhaps Visa’s biggest concern right now is how its business could be disrupted by the Russian-Ukrainian conflict. As a business that depends on increased consumer and business spending, economic sanctions imposed on Russia could have negative repercussions in the region or the world.

But that’s a relatively short-sighted concern for Visa. Over the long term, the company’s cyclical links are one of its best attributes. By “cyclical” I mean that Visa tends to perform well when the US and global economy is in full swing, and struggles when recessions hit. The important thing is that recessions usually last only a few months to a few quarters, while periods of economic expansion are measured in years. Buying Visa is a smart way for investors to take advantage of the natural expansion of the US and global economy.

Speaking of the latter, Visa has an expansive track with which to grow from a high single-digit or low double-digit percentage. Many parts of the world, such as the Middle East, Africa and Southeast Asia, remain underbanked. Visa has the ability to organically expand its payments infrastructure in these markets, or can rely on acquisitions to make its mark (e.g., the takeover of Visa Europe in 2016).

Also note, Visa is purely a payment processor and not a lender. You might be scratching your head and wondering why he’s not diving into the loan market. After all, long periods of economic expansion would allow lenders to generate interest and fee income. However, the loans would also expose Visa to potential credit/loan defaults. Avoiding loans altogether means Visa doesn’t have to set aside capital to cover losses, allowing it to bounce back from recessions and economic contractions faster than most financial stocks.

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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