Getting from Point A to B on Wall Street rarely, if ever, occurs in a straight line. Although the major indexes have steadily increased in value when examined over multiple decades, stock market corrections and bear markets are normal occurrences in the long-term investing cycle.
Since this decade began, investors have navigated their way through two bear markets -- the COVID-19 crash in 2020 and the 2022 bear market. Despite all three major stock indexes rallying more than 20% off of their 2022 bear market lows, they're still markedly below their record highs, which were set between November 2021 and January 2022. In other words, bargains still abound for patient investors willing to seek them out.
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Best of all, most online brokerages have done away with commission fees and minimum deposit requirements. For everyday investors, it means any amount of money -- even $300 -- can be the ideal amount to invest right now.
If you have $300 that's ready to be put to work, and you're certain you won't need this money to pay bills or cover emergencies, the following three stocks stand out as no-brainer buys right now.
Nio
The first surefire buy for long-term investors with $300 is China-based electric-vehicle (EV) manufacturer Nio (NIO 8.72%).
Though EVs should be one of the most exciting and sustainable growth stories over the next 10 to 20 years, the ramp up in production won't be without its hiccups and casualties. For instance, Nio's production was hindered for more than three years by China's stringent COVID-19 mitigation strategy, which led to a host of supply chain constraints.
But there's good news on this front. This past December, China abandoned its controversial "zero-COVID" strategy and effectively reopened its economy. While it's going to take a couple of quarters for things to get back up to full speed, the proverbial parking brake on Nio's production has been removed.
In July and August, the company tallied its two best months for deliveries in its history. In fact, Nio is getting close to an annual run-rate of 250,000 EVs, based on the 20,462 EVs delivered in July and 19,329 EVs delivered in August.
While consumers are certainly eager to buy EVs, the driving force (pun intended) behind Nio's delivery resurgence looks to be the introduction of its NT 2.0 platform. This second-generation platform provides clear improvements in advanced driver assistance systems.
In July, the ES6 SUV, which is now running on this new platform, saw deliveries surpass 10,000. What this tells us as investors is that buyers were waiting for the company to introduce its new platform before pulling the trigger. With NT 2.0 integrated into the company's latest offerings, we're seeing strong demand.
The company's balance sheet is another source of optimism. Building an auto company from the ground up takes a lot of capital. Nio closed out the June-ended quarter with $4.3 billion in cash, cash equivalents, and various short/long-term investments and restricted cash. What's more, it's no longer offering free battery swaps for new EV buyers. Instead, it's offering these services for a one-time fee. Being more mindful of its expenses may allow Nio to turn the corner to recurring profitability within the next two years.
York Water
A second no-brainer stock that can confidently be purchased right now with $300 is small-cap water utility York Water (YORW). York provides water and wastewater services to 54 municipalities spanning three counties in South-Central Pennsylvania.
The beauty of water utilities is the predictability of their operating cash flow. Water is a basic necessity of homeowners and renters, which means water and wastewater service demand isn't going to change much from one year to the next. York being able to accurately predict its operating cash flow is imperative given the constant need to reinvest in its infrastructure, as well as make acquisitions to expand its reach.
To add to the above, utilities typically operate as monopolies or duopolies. Since the cost of laying infrastructure is prohibitively high, utilities rarely face any competition. This further enhances the transparency of the cash flow a company like York Water generates.
Another reason investors can place their trust in York is because it's a regulated utility. What this means is York can't raise its rates without the consent of the Pennsylvania Public Utility Commission (PPUC). On the surface, having no control over pricing might sound annoying -- but it's actually a blessing in disguise. Not being exposed to wholesale pricing makes York's operating cash flow that much more predictable.
Perhaps the biggest catalyst for York Water in 2023 (and moving forward) is that the PPUC granted the company the ability to increase rates on approximately 75,000 customers. This rate hike will help the company recover $176 million in ongoing and future investments in infrastructure. This rate increase is expected to boost the company's annual revenue by about 22%. That's not pocket change.
Lastly, York Water's dividend is truly something special. Though its 2% yield is nothing to write home about -- this relatively "low" yield is a function of its share price rising more than 610% since this century began -- no publicly traded company offers a longer streak of consecutive dividend payouts than the little-known York. It's paid a dividend to its shareholders, without fail, in each of the 207 years since its founding.
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CrowdStrike Holdings
The third no-brainer stock to buy with $300 right now is none other than scorching-hot cybersecurity stock CrowdStrike Holdings (CRWD 2.03%).
Arguably the biggest headwind CrowdStrike will have to overcome is its premium valuation. With interest rates rising at their fastest pace in decades, and multiple economic indicators and predictive metrics suggesting the U.S. economy is headed for a rough patch during the quarters to come, investors may be far less willing to pay a premium for growth stocks.
However, CrowdStrike has demonstrated time and again that it's worth every penny of its premium valuation.
The fuel behind CrowdStrike's phenomenal operating performance is Falcon, the company's cloud-native, artificial intelligence (AI)-driven security platform. Falcon utilizes machine learning and oversees trillions of events each week, with a goal of becoming smarter and more efficient at detecting and responding to potential threats.
What's noteworthy about Falcon is that it's not particularly inexpensive -- but that's not stopping businesses from latching on. Even though cheaper end-user cybersecurity solutions exist, CrowdStrike's gross retention has expanded more than four percentage points since the beginning of fiscal 2018 to 98%. CrowdStrike's fiscal year ends January 31.
The company's add-on sales are even more impressive. Back in fiscal 2017, when CrowdStrike was still relatively young, it had just a single-digit percentage of its customers purchasing four or more of its cloud-module subscriptions. As of the end of July 2023, a whopping 63% of its clients had purchased at least five of its cloud-module subscriptions. These add-on purchases have helped drive the company's adjusted gross subscription margin to a hearty 80% through the first half of fiscal 2024.
The cherry on the sundae for CrowdStrike is that it's operating in an industry that's providing a basic necessity service. Hackers and robots are going to try to steal sensitive information regardless of how well or poorly the U.S. economy is performing. With businesses shifting their presence and data online and into the cloud at an accelerated pace, it means companies like CrowdStrike are being counted on more than ever before.
With a superior growth rate and its forward-year earnings estimates regularly climbing, CrowdStrike is a lot cheaper than most investors probably realize.
