The bear market left many stocks trading for a bargain. And that means your $1,000 can go pretty far these days. With that investment -- or even less -- you can get in on several remarkable stocks. By this, I mean companies with a track record of earnings growth and prospects for more growth in earnings and share price down the road.
The retail sector is a great place to find these players. Yes, economic woes still represent a headwind. But the situation is temporary. Many of these companies still have what it takes to deliver long-term growth. And now is the time to get in on their stories.
Let's check out three of the best stocks to buy now with $1,000.
1. Amazon
Amazon (AMZN -0.98%) stock sank last year after the company's earnings disappointed investors quarter after quarter. Higher inflation increased Amazon's costs. And it left the company's e-commerce and cloud computing customers with less money to spend. All of this hurt Amazon's margins, operating income, and operating cash flow.
But Amazon has taken action to improve its cost structure -- and the efforts should help the company get through today's tough times and prosper once the economy improves. At the same time, Amazon has increased investment in cloud computing infrastructure. Amazon Web Services (AWS) customers may be spending less -- but they're still spending enough to drive double-digit gains in AWS sales.
Amazon also continues to strengthen its offerings for members of its Prime subscription service. It just launched a new program that delivers unlimited commonly prescribed generic medicines to members for an extra $5 a month. In recent earnings reports, Amazon has said members depend more and more on Prime.
Amazon has grown earnings over time. And efforts today should help the company get back on that path. That's why the shares -- trading at their cheapest level in relation to sales since 2015 -- look dirt cheap today.
2. Etsy
Etsy (ETSY -1.72%) shares soared during the earlier days of the pandemic as people favored online shopping over in-store shopping. Etsy is an e-commerce platform that brings together buyers and sellers of handmade items.
But this company isn't a pandemic-only stock. Etsy's sales already were on the rise before the health crisis. And it's kept a lot of the gains it's made over the past three years. For example, Etsy marketplace's gross merchandise sales in the third quarter totaled $2.6 billion. That's compared to $1 billion for the same quarter in 2019.
Etsy also is adding more new buyers than it did a few years ago. And the company can count on the loyalty of its habitual buyers. They drove 46% of sales in the quarter.
Etsy faces the current headwinds of negative currency exchanges and rising inflation. But economic woes have less of an impact on Etsy than on other retailers. That's because Etsy doesn't stock and ship items. Those that sell on its platform do. And since these sellers are small businesses, they also don't face the same costs and logistics challenges as big companies. All of this should help Etsy through these difficult times.
Today, Etsy shares are trading for almost 33 times forward earnings estimates, down from about 40 a year ago. This looks like a great opportunity to get in on this promising growth company.
3. Home Depot
Home Depot (HD -0.10%) shares fell more than 23% last year. That's even as the world's largest home improvement retailer continued to report earnings growth. General economic woes pushed investors to favor stocks less sensitive to consumer spending.
But investors should consider stocks on a case-by-case basis. Home Depot hasn't seen a drop in demand. In fact, it's reported sales growth in its do-it-yourself and professional business categories.
In the most recent quarter, the company's 19 U.S. regions, as well as stores in Canada and Mexico, all reported comparable sales growth year over year. And diluted earnings per share climbed 8.2% to $4.24.
Importantly, Home Depot's professional customers say their backlogs remain strong. This suggests they'll continue to buy products at Home Depot in the coming months to fulfill those projects. This offers us visibility -- and the picture looks positive.
Home Depot's presence in e-commerce is also encouraging. Sales using its digital platforms rose 10% in the quarter. And the connection between stores and digital is serving Home Depot well. Stores fulfilled about 50% of online orders in the quarter.
Home Depot shares trade for less than 20 times forward earnings estimates. With earnings that have defied today's economic situation and a promising growth picture ahead, this looks like the perfect investment for at least part of your $1,000 today.
