It's useful to prepare a watchlist of stocks that you plan to accumulate. The markets are seeing heightened volatility in the past few months as the Federal Reserve hikes interest rates to tackle runaway inflation. With the NASDAQ Composite Index and S&P 500 already in a bear market this year, stock prices may have room to fall further. You should see a market correction as a golden opportunity to either accumulate more shares of companies you already own or to start a new position in a company that's become much cheaper.
Of course, you'll need to ensure several attributes are in place before you pull the trigger. The business needs to demonstrate steady growth, be a dominant player within its industry, and enjoy tailwinds that will allow them to continue doing well. With these characteristics in place, a buy-and-hold strategy can ensure that you enjoy steady compounding to achieve your retirement goals.
Here are five stocks you can consider buying during the next market correction.
Starbucks (SBUX 0.18%) is a global coffee chain with more than 34,000 stores around the world. The company reported an encouraging set of earnings for its fiscal 2022's third quarter, with net revenue up 9% year over year to a record $8.2 billion. Comparable-store sales were up 3% globally, with the U.S. registering a 9% increase, and active Starbucks reward members climbed 13% year over year in the U.S. to 27.4 million members.
During its recent biennial Investor Day, Starbucks unveiled an ambitious three-year financial roadmap to deliver annual comparable store sales growth of 7% to 9%, revenue growth of 10% to 12%, and earnings-per-share (EPS) growth of 15% to 20%. Founder and interim CEO Howard Shultz also introduced incoming CEO Laxman Narasimhan, who will assume his new role on April 1 next year. With this plan, it seems the company is kicking into high gear to deliver steady earnings growth for investors.
Lululemon (LULU 5.37%) is a market leader for athletic apparel and footwear for yoga, running, and training and provides innovative materials and interesting designs for its products. Results for its fiscal 2022's second quarter were impressive. Revenue increased 29% year over year to $1.9 billion, with comparable-store sales jumping 23% year over year. Net income surged by 39.1% year over year to $289.5 million, partially lifted by a $10.2 million one-off gain from the disposal of an administrative building.
Lululemon has reported that supply chain woes are easing, allowing the company to manufacture the products it needs to satisfy strong demand. The sports apparel company expects net revenue to grow at a three-year compound annual growth rate of around 26% and for 2022 to register sales of between $7.87 billion to $7.94 billion.
Okta (OKTA 0.01%) is a software-as-a-service business that offers identity management services to more than 16,400 customers to help their systems set up secure and convenient access. Okta's shares may have declined by nearly 72% year to date, but the company is still knocking the lights out with its latest Q2 2023 earnings. Revenue grew 43% year over year, with subscription revenue growing by 44% year over year. Subscription backlog improved by 25% year over year to 2.8 billion, while billings increased by 36% year over year.
Okta believes there is a significant opportunity for it to continue growing as the total addressable market for its business is around $80 billion. The company has identified various growth drivers and will be implementing them to drive its top and bottom lines. It will work on improving its platform and network and also use its successful "land and expand" strategy in large organizations. International expansion is also on the cards as U.S. revenue made up more than three quarters of total revenue for the quarter.
If you're looking for a quick, secure, and convenient way to digitally sign your business agreements, DocuSign (DOCU 4.83%) has a cloud service that provides this service. The company boasts more than a billion users in 180 countries and also reported a solid Q2 2023 report card. Subscription and total revenue continued climbing, up 23% and 22% year over year, respectively. Billings also saw an increase of 9% year over year.
DocuSign believes that its Agreement Cloud has a large market opportunity with a total addressable market of around $50 billion. The company is confident in driving new use-cases such as the notarization of documents and analytics. By expanding on these new uses, DocuSign can drive greater adoption throughout the organization.
Chipotle Mexican Grill
Chipotle Mexican Grill (CMG 0.75%) offers a wide menu of food items using responsibly sourced ingredients that do not contain artificial colors, flavors, or preservatives. The Mexican food chain, which boasts 3,000 restaurants in the U.S. and parts of Europe, reported continued growth in its Q2 2022 earnings report. Total revenue rose 17% year over year to $2.2 billion, with comparable-store sales up 10.1% year over year. Digital sales made up nearly 40% of revenue, showcasing the success with which Chipotle had achieved by pivoting to online orders during the pandemic.
The company is pushing on with new store openings and expects to open between 235 and 250 new restaurants in 2022. The board of directors had also approved an additional $300 million to be used for share buybacks.