When you've got the bear market blues, take a look back in time. History tells us something important: Bull markets always follow bear markets. And that means a bull market is on the way. Of course, we don't know exactly when it will begin. But history also indicates the typical bear market lasts about a year. So brighter days may not be too far off.
And the best way to prepare for the good days is to invest. Today, many quality companies are trading at bargain prices. This represents a huge opportunity for you as a long-term investor. Let's check out three magnificent stocks that could strengthen your portfolio during the next bull market.
1. Home Depot
Home Depot (HD 0.17%) managed to increase revenue and profit last year in spite of a difficult economic environment. The world's biggest home improvement retailer reported more than $157 billion in sales and about $17 billion in net earnings. This is as the company faced challenges like rising inflation and supply chain problems.
This year is set to be a slower one for Home Depot as the impact of higher inflation starts putting the brakes on some home improvement projects. Still, this is a temporary situation -- and over the long haul, Home Depot's picture looks as bright as ever.
Home Depot has increased sales by about $47 billion over three years. And last year the company invested $3.1 billion in elements to drive long-term growth. These include building out the supply chain and improving the overall digital platform as well as the online platform for professional customers.
Today, Home Depot shares are trading for about 17 times forward earnings estimates -- down from more than 20 last month. Considering Home Depot's strength over time and future prospects, this is one to buy on the dip.
2. Nike
Like other retailers, Nike (NKE -0.74%) has struggled with higher inflation, supply chain issues, and coronavirus disruptions. One big problem has been controlling inventory levels. Nike had to use markdowns as a tool in recent times -- and this hurt margins. But the good news is, thanks to this effort, the inventory situation has greatly improved.
And the company's brand strength has kept it on top. In the most recent quarter, overall revenue, Nike direct sales, Nike brand digital sales, and wholesale revenue all climbed in the double digits.
Nike has been a popular brand for years -- but the launch of a plan back in 2017 to sell more directly to customers and boost its digital presence has pushed Nike into a new era of growth.
Today, fans rush to online drops of the latest sneaker. And Nike uses research from its apps like Nike Run Club to develop products that will please fans. Nike says its basketball category "is in the strongest position it's ever been."
Right now, Nike shares are trading at 36 times forward earnings estimates, down from more than 39 last month. Once economic pressures ease, valuation clearly could head higher thanks to Nike's solid relationship with fans.
3. Walt Disney
Walt Disney (DIS -0.30%) has reached an important turning point. The entertainment giant finished its last fiscal year, in October, with a need for change. Disney's heavy investment in its streaming services brought in a huge number of subscribers -- but costs had climbed.
So, in November, Disney brought back one of its most successful chief executive officers to put it on the right track to growth. CEO Bob Iger already has taken action. Various efforts including job cuts and reductions in other areas like marketing set Disney on track for $5.5 billion in cost savings.
Iger still aims to drive subscriber growth at the streaming services, but not at the expense of eventual profitability. Instead, he is putting the focus on creating only the best content and carefully evaluating its performance.
Meanwhile, the parks business continues to excel. The parks, experiences, and products unit reported double-digit increases in revenue and operating income in the most recent quarter. And Disney says demand at the parks remains strong.
Disney trades for 22 times forward earnings estimates, down from more than 35 a year ago. Considering Iger's plan and the parks business's strength, this entertainment stock looks like a screaming buy right now.
