Many investors have a list of stocks they are keeping their eye on. Some might be stocks already in the portfolio that could be added to, and others could be stocks to keep an eye on as future portfolio additions. Keeping track of potential stock buys can help investors make more informed decisions, and keep an eye on any important news.
Here are three stocks that I think are a buy right now, and that should be on any investor's list of potential investments. Each has strong historical results and a bright future. Let's dig in to see what has these companies at the top of my list.
NASDAQ: COST
Key Data Points
Costco
If you've ever had the experience of navigating a crowded Costco Wholesale (COST 0.66%) parking lot just to get into the store, you've experienced why the company has grown to be the third-largest retailer in the world. Costco's membership fee business model was unique when it began, but it has been a driver of the company's results for decades. In the last 12 months, Costco brought in nearly $5 billion in membership fees.
Costco has also proven to be resilient to slowing economic conditions. While we may not be in a recession, inflation has led to people pulling back on spending, if only a little. To the extent that's the case, Costco has not felt it. In its fiscal second quarter, which ended in February, Costco reported same-store sales growth of 5.6% and an increase of 5.3% in traffic. Costco's value proposition is clear to its members, who renew at a rate of over 90%.
NASDAQ: AMZN
Key Data Points
Amazon
For those not paying attention to Amazon's (AMZN +1.93%) stock over the past few years, it may come as a surprise that in 2022 it traded for its lowest price since early 2019. This was due to substantial operating losses in its e-commerce business because of the spending on its distribution footprint necessary to meet pandemic-fueled demand. Over the past year, the improvement has been impressive.
In fourth-quarter 2022, Amazon reported an operating loss of $240 million in its North America segment (which is essentially the e-commerce business in North America) and an operating loss of $2.2 billion in its International segment (which is essentially the e-commerce business outside of North America). In Q4 2023, these improved to an operating income of $6.6 billion in North America and an operating loss of $419 million in the International segment.
These figures are a result of a concerted effort to rightsize the business coming out of the pandemic's height. This improvement in operating results led to net income improving by more than $10 billion and free cash flow increasing by nearly $50 billion.
NYSE: CPNG
Key Data Points
Coupang
If you read about Korean e-commerce giant Coupang (CPNG +10.87%), you'd be forgiven for assuming you were reading about Amazon instead. Taking a play directly out of the Amazon playbook, Coupang has grown to be a formidable player for e-commerce on the Korean peninsula and has recently expanded abroad, most notably into Taiwan.
In Q4 2023, Coupang reported that its active customers grew 16% year over year to 21 million. Much like Amazon's Prime offering, Coupang has a membership program called Rocket WOW that includes free shipping, free returns, and dawn and same-day delivery. Growth in WOW members was 27% in Q4, outpacing overall membership growth and demonstrating the popularity and value proposition of the Rocket WOW program.
Coupang is also starting to see economies of scale as it grows. In Q4 2023, operating income was $473 million, a substantial improvement from the $112 million operating loss posted in Q4 2022. Free cash flow followed a similar trajectory, growing by approximately $2 billion year over year.
