Currently, the stock market is going through a not-so-aggressive stage as it has had its share of fluctuations and corrections. This is the time when the stocks are settling down nicely, giving ample time for investors to decide whether to invest in them. As an investor, you must try to analyse the bigger picture that is behind these share prices. The stocks that look expensive at the moment may actually be great opportunities of investment for you, as these stocks would grow to great heights in the future. Therefore, you must never make a decision based on the face value of these share prices; you must spend considerable time and effort to understand their potential and invest in them, though they look costly as of now. The following are some of the stocks that are great choices for you to buy now:
Integrated business and great pipeline network
Wall Street experts recommend that ExxonMobil (XOM, Financial), one of the leaders in the oil and gas industry, is one of the must-buy stocks now, because the shares are currently trading at a price that is far lower than its potential of growth. Due to the slump in oil prices, almost all oil companies are going through a downside on their share prices; however, ExxonMobil is the only one that experts recommend you to buy because this company has a strong integrated business in the form of oil refining and marketing. These sectors have grown by a considerable margin during last year, even as the exploration industry suffered due to the reduction in oil prices. The highlight of the downstream operations (refining) is that, it tends to improve with the fall in oil prices.
With the oil prices not looking to come back to their original prices for a long time now, ExxonMobil is all set to turn the situation to its advantage as it will gain good revenues from its integrated businesses. Also, it has a good network of pipeline where it stores gas until the market conditions start looking up again. This storage facility is a feature most of Exxon’s competitors don’t have. With all these factors working in Exxon's favor, it cannot be denied that the company is all set to grow nicely in the future. With these points in mind, Wall Street experts recommend buying this stock as it will provide good returns to shareholders in the future. The following is the stock movement trend of ExxonMobil for the last year.
Market overreactions have made prices cheap
The next stock that Wall Street experts recommend for investors to buy, because the prices are cheap now, is American Express (AXP, Financial). This could be quite surprising as the last year was not good for American Express. The payment processing giant lost two very important partnerships during 2014 – one with the retail major, Costco Wholesale (COST, Financial) and the other with JetBlue (JBLU, Financial). Both of these losses had an impact on share prices as the prices came down by 13% during the first three months of 2015, as can be seen from the chart below:
In spite of all these unfavourable factors, why is American Express highly recommended by experts? It is because the company is so strong that it can manage its operations quite well even without the presence of any great partnerships. According to the top management, the company is well on its way to increase its earnings per share by the anticipated level of 12 to 15% for this year. It plans to earn more revenues by targeting the affluent customers by way of organising exclusive clubs for cardholders and by charging higher charges from merchants whenever customers use their cards for payment. Also, being one of the prime players in the payment processing industry, American Express has the advantage of collecting a higher charge of annual fee from its customers than the fees collected by other card companies. There are lots of opportunities for increased revenues this year, in spite of broken partnerships. It would be a wise move to invest in this stock right away, if you are looking for handsome returns in the future.
Conclusion
From a sea of stocks trading at attractive prices, only a few are recommended as “must-buy” by Wall Street experts. The above stocks are some of the strong recommendations, purely because of the extent to which they can grow in the future and their ability to make their investors happy. The only thing that investors should keep in mind is that, they need to be patient to get the full benefit from these stocks.
