For much of 2021, the stock market has proved unstoppable. On Wednesday, Aug. 25, the S&P 500 closed at a record high. It was the 51st time this year the benchmark index closed at a record; and it marked the first time, at least on an intraday basis, the widely followed index touched 4,500.
While some of you might be leery about the idea of putting money to work in the market with it just a stone's throw from another record close, the S&P 500's sheer outperformance demonstrates the need to allow your investment theses to play out over the long run. Put another way, it's always a good time to invest for the future if your holding timeline is measured in years.
With that being said, you also don't need a boatload of cash to begin or further your trek toward financial freedom. If you have $400 available, which won't be needed for bills or to cover emergencies, the following five companies are no-brainer stocks you can buy right now.
Among mega-cap stocks, few, if any, stand out as more attractive from a long-term perspective than cloud-based customer relationship management (CRM) software provider Salesforce.com (CRM 1.14%).
CRM software is used by consumer-facing businesses to build and enhance customer relationships, and ultimately to improve sales. While it's a commonly deployed solution for the retail and service industries, we're seeing broader adoption by the healthcare and finance sectors. CRM software offers sustainable double-digit growth potential through at least mid-decade, if not beyond.
Salesforce slides in as the clear-cut, most-dominant CRM software provider. When IDC examined global CRM market share by revenue during the first half of 2020, it found that Salesforce controlled more share at No. 1 (19.8%) than No.'s 2 through 5, combined! This implies that its market share lead is secure for many years to come.
Equally important, Salesforce CEO Marc Benioff has been a mastermind on the acquisition front. Acquiring MuleSoft and Tableau expanded the reach of its cloud-based platform. Now, with the buyout of cloud-based enterprise communications platform Slack Technologies complete, it has yet another platform to cross-sell its solutions to reach a new channel of potential customers. With Benioff projecting $50 billion in full-year sales by fiscal 2026, investors would be wise to jump onboard.
Bristol Myers Squibb
For value stock investors, one of the standout, no-brainer buys at the moment is pharmaceutical stock Bristol Myers Squibb (BMY -0.28%). Shares of the company can be scooped up for about eight times Wall Street's forecasted earnings per share for 2022.
The beauty of the Bristol Myers Squibb operating model is that it's being fueled by internal innovation and acquisitions. In terms of organic growth, Eliquis has become the world's leading oral anticoagulant. The drug, developed in cooperation with Pfizer, is on pace to top $10 billion in sales for Bristol this year.
There's also cancer immunotherapy Opdivo, which has 10 approved indications, according to the Food and Drug Administration, but is being studied in dozens of ongoing clinical trials as a monotherapy and combination treatment. Thus, label expansion opportunities and strong pricing power should fuel Opdivo's sales for the foreseeable future.
On the acquisition front, Bristol Myers closed a deal to buy cancer and immunology powerhouse Celgene in November 2019. Though this deal brought a couple of blockbusters into the fold, the prize of the deal is multiple myeloma drug Revlimid. Between increased duration of use, label expansions, pricing power, and improved cancer-screening diagnostics, Revlimid has delivered double-digit annual sales growth for more than a decade. It's a drug capable of $12 billion-plus in annual sales, and its sales stream is protected from an onslaught of generic competition until early 2026.
Kirkland Lake Gold
The first things you'll appreciate are the generally positive tailwinds for gold, which is what Kirkland Lake mines. Historically low lending rates and low bond yields make it unlikely that investors will find steady income sources capable of outpacing inflation. At the same time, rising inflation tends to coerce some folks to purchase gold as a store of value. Long story short, the lustrous yellow metal shouldn't have any trouble maintaining its value or heading higher in the coming years.
More specific to Kirkland Lake Gold, it's one of the most efficient mining companies. Its three mines are on track to hit the upper end of the company's gold production forecast of 1.3 million ounces to 1.4 million ounces in 2021, and its all-in sustaining costs came in near an industry low in the second quarter at $780 per ounce. This represents about a $1,000 per ounce margin at the moment.
Kirkland Lake Gold also has the best balance sheet among gold stocks. It ended June with $858.4 million in cash, and no debt. Mind you, this cash pile is after repurchasing 20 million of its own shares (beginning last year) and tripling its quarterly dividend. It's one of the premier gold stocks to own.
Generally, a clinical-stage biotech wouldn't qualify as a no-brainer buy. However, Novavax is a special case. That's because its coronavirus vaccine, NVX-CoV2373, has an exceptionally good likelihood of receiving emergency use authorization in numerous developed markets, including the U.S., U.K., and Europe, within the months to come.
Even as a later entrant into the coronavirus vaccine space, Novavax should have little issue carving out significant sales for years to come. That's because its experimental vaccine led to efficacy of 89.7% in a large-scale U.K. study and an equally impressive 90.4% efficacy in the phase 3 U.S. and Mexico trial. Based solely on initial efficacy and the need to vaccinate billions of people worldwide, Novavax's therapy is highly promising.
What's more, Novavax is in the early stages of developing a combination vaccine for COVID-19 and influenza. If successful, this would really differentiate its offering from its larger peers and provide a lucrative and sustainable revenue stream. Based on sales and profit potential, Novavax remains inexpensive, even after its huge run.
Bank of America
A final no-brainer investment that's perfect for long-term investors who value a hearty capital return plan is Bank of America (BAC -1.11%).
It's no secret that bank stocks are cyclical. This is a fancy way of saying that banks struggle when economic contractions and recessions arise. The thing is, recessions tend to be measured in months or quarters. By comparison, periods of economic expansion usually last years, or even a decade. Thus, companies like BofA navigate their way through short-term hiccups, but enjoy the benefits of disproportionately longer periods of expansion.
What makes Bank of America so intriguing is its interest rate sensitivity. In the company's second-quarter earnings presentation, it notes that a 100-basis-point parallel shift in the interest rate yield curve would generate an estimated $8 billion in added net interest income over the coming 12 months. While this yield curve shift is unlikely to occur in the next 12 months, the inevitable uptick in interest rates should send profit directly to BofA's bottom line on existing loans.
Bank of America is getting with the times, too. Digital engagement has picked up markedly since the pandemic began, which is inspiring the company to invest heavily in digitization and consolidate some of its branches in an effort to cut costs.
With annual capital return plans often measured in the tens of billions during periods of expansion, Bank of America is a rock-solid holding for patient investors with $400 to spare.