3 Stocks That Are Screaming Deals IF We Don’t Get a Recession After All
Recession talks are scary, but it’s important to remember that a recession isn’t the only outcome. Indeed, plenty of stocks for long-term investors are available to buy now, ones that might provide great returns regardless of whether we get a recession or not.
And so, let’s look at three stocks that are excellent deals if a recession isn’t in the cards for 2023.
Homebuilder stocks such as Lennar (NYSE:LEN) have rebounded after a notable correction in 2022. With a 37% year-to-date (YTD) gain and 81% increase over 52 weeks, its 1.2% yield appears appealing. Lennar’s S&P 500 rank of eighth for five-year dividend growth at 53.8% adds to its attractiveness.
In Q2 2023, revenues dipped due to lower average home prices at $449,000 versus $500,000 last year, resulting in lower earnings of $872 million from $1.3 billion. Nonetheless, positive signs emerged: home delivery volumes rose 3% year over year (YOY) to 17,074, and cost reductions boosted gross margins.
Plus, management anticipates more cost declines with easing input inflation. Lennar’s status as a national home builder positions it well in an undersupplied market. This makes it a prospective top wealth-building stock in the coming decade.
Regional Bank ETF (KRE)
The recent journey of the SPDR S&P Regional Banking ETF (NYSEARCA:KRE) has been remarkable. The unexpected 7% decline in May in the KRE ETF is unusual for a diversified fund that holds regional banks. This kind of movement can occur due to sector-wide shifts in investor sentiment. YTD, the KRE ETF has plummeted by 32%, raising concerns due to the magnitude of the decline similar to past economic crises.
However, regional banks are more resilient and can outperform amid a recession. Plus, the KRE ETF has proved to be slowly gaining momentum as economic indicators show positive signs of recovery.
This ETF provides exposure to the regional bank sector which includes institutions that focus on providing banking services in one region or state instead of nationwide. It is also an excellent way for investors to gain direct exposure to regional bank stocks without attempting to pick individual winners.
Tesla (NASDAQ:TSLA) leads in EV production and uses a demand-stimulating strategy with a record $24.93 billion revenue. Sacrificing margin raised concerns, but TSLA stock has a tech focus and EV charging presence that impacts its valuation perception.
Moreover, the company has reduced prices for Model Y long-range and performance versions by almost $2,000 in China. Elon Musk hints at more cuts. Tesla aims to manage inventory by adjusting prices in various markets.
Tesla is capitalizing on incentives to increase U.S. production despite past capacity issues. Q2 brought mixed results, with strong revenue but lower operating margins due to lower vehicle prices. This has affected Tesla’s stock recently, but some see it as a positive entry opportunity.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.