The bear market is still going strong, but it's only a matter of time before it comes to an end. Just as in all downturns in the past, the economy will recover, and the stock market will rebound as well.
If you're able to invest in the stock market today and are willing to buy and hold for multiple years, three stocks you should consider loading up on are Alibaba Group Holdings (BABA 2.80%), Comcast (CMCSA -0.53%), and Gilead Sciences (GILD -0.21%).
1. Alibaba Group Holdings
Chinese internet giant and media company Alibaba has seen its share price collapse over the past three years, with its value nosediving by more than 50%. Concerns related to Chinese stocks getting delisted from U.S. exchanges and extreme zero-COVID policies in China are some of the main reasons investors haven't been quick to buy up shares of Alibaba.
As long as China-U.S. relations aren't great, there's going to be some geopolitical risk here. But given the low multiple at which Alibaba trades, the risk is arguably priced into the current valuation. At just nine times its future profits (based on analyst expectations), the stock is trading well below the 17 times future earnings the S&P 500 averages.
The company reported earnings last month, and it beat expectations, with revenue rising 2% to $35.9 billion for the last three months of 2022. Although its sales growth isn't as impressive as it was in the past, the business could rebound now that China has loosened its COVID restrictions. And with Alibaba developing an artificial intelligence product similar to ChatGPT, investors shouldn't be so quick to count out this top Chinese stock, as the company is by no means out of growth opportunities.
2. Comcast
Another cheap stock that may be a great buy right now is Comcast. It's trading at around 9 times future earnings as well, and it's a safer buy than Alibaba. Philadelphia-based Comcast is a top media and technology company in the U.S., known for its popular NBC and Xfinity brands.
Comcast is facing lots of competition from other wireless carriers, and the stock is down 23% in the past year. But the business is diverse and has continued to grow. Last year, revenue rose 4% to $121.4 billion and was up 17% over a two-year timeframe. Its total cable business accounts for roughly half of all sales.
Comcast also has Sky (a top European entertainment company), media, theme parks, and movies that also generate meaningful amounts of revenue for the business. That diversification ensures that the company isn't too dependent on one area of its business, and can make Comcast a relatively safe investment to buy and hold for the long term.
Given its low valuation and with Comcast also paying a high yield of 3.2% (the S&P 500 average is just 1.7%), there's no shortage of reasons why investors may be tempted to buy the stock. And its valuation could attract even more attention when a bull market arrives and there's more money flowing back into the stock market.
3. Gilead Sciences
Investors can collect even more money from Gilead Sciences, a top HIV drug company whose dividend currently yields 3.8%. At 11 times future earnings, it's the most expensive stock on this list (based on that metric), and yet it still looks incredibly cheap. And unlike the other two stocks on this list, shares of the healthcare company have been rising over the past year -- up 33%.
One exciting reason for buying and holding the stock is that late last year, the U.S. Food and Drug Administration (FDA) approved its twice-yearly injectable for HIV, Sunlenca. While it's currently approved only for people with HIV who "cannot be successfully treated with other available treatments due to resistance, intolerance, or safety considerations," it's a significant advancement, as many people have to take daily pills to treat HIV.
Another reason the stock could go higher is the success of its cancer drug Trodelvy, which the FDA approved last month for a third indication, to treat a second type of breast cancer (it's also approved to treat bladder cancer). The drug has the potential to be a blockbuster. This year, analysts project it will come close to the $1 billion mark in sales, with the average estimate being just over $955 million in revenue.
Gilead's growing business and solid valuation could help its shares gain momentum in a bull market. So now may be a good time for investors to take a position.
