Yesterday, as the Dow continued its 512-point drop, we spent four-and-a-half hours chatting live with concerned Fools. Many requested a few simple ideas for opportunities worth seizing amid this market sell-off. We solicited six compelling candidates from Motley Fool advisors, analysts, and editors -- and our CEO.
Tom Gardner, Motley Fool co-founder and CEO, and Stock Advisor co-advisor:
If you believe that the U.S. is headed back into recession, and you believe that our political officials won't see the light on the critical need to both close tax loopholes and ratchet back spending, then you'll naturally want to take your portfolio into a more defensive stance. But how? I recommend looking for companies with these six traits:
- Easy access to capital (their own!)
- Substantial future opportunities in foreign markets
- A stellar history of operating results
- The reputation of being a cost-saver for consumers
- World-class leadership
- A steady dividend
This is why my recommendation is a core stock holding of mine in our Stock Advisor service: Costco
Jeff Fischer, advisor, Motley Fool Pro and Motley Fool Options:
Eric Bleeker, Fool.com technology editor:
I like cheap stocks, but I love "are you kidding me?" cheap stocks. After sliding nearly 18% in the past two weeks, EMC
True, the stock still trades at 25 times earnings. However, that metric conceals EMC's 80% stake in virtualization kingpin VMware
If the market rout continues, EMC's a great way to buy an industry-leading company with very high upside potential. This is one deal I won't be passing up.
David Williamson, Fool.com health-care editor:
Suffering from feelings of anxiety, insomnia, and even depression when watching the markets? Bristol-Myers Squibb
The market doesn't appreciate the potential of the company's pipeline. Although the "patent cliff" is set to do a number on earnings across the industry, recent Bristol-Myers successes including Yervoy and atrial fibrillation frontrunner Eliquis will allow the company to absorb the loss of top-selling drug Plavix better than Eli Lilly will weather losing its top drug, Zyprexa. So while earnings may tread water in the short term as Bristol-Myers transitions to new products, this stock tops its sector for long-term potential. And while you're waiting for that growth to fully kick in, you'll enjoy a substantial dividend yield of 4.7%.
Buck Hartzell, director of analyst learning:
Over the past 12 months, White Mountains Insurance
With that adjustment, White Mountain's book value will reach a lofty $530 per share. Don't let the high altitude of the absolute stock price scare you off -- this thing is trading hands at only three-quarters of its own book value. The chairlift is leaving the station, so don't miss it this well-run, cash-flush business.
Brian Richards, Fool.com managing editor:
I'm going to cheat a little bit and give an exchange-traded fund rather than a stock: Vanguard Dividend Achievers
The fund's top 10 holdings, which alone make up 40% of assets, are a who's-who of dividend-paying blue chips: stocks like McDonald's, IBM, and Coca-Cola. At just more than 2%, the ETF's yield isn't overwhelming, but remember: Those payouts should grow over time.
For more ideas, click here to try Motley Fool Stock Advisor free for 30 days.
Buck Hartzell owns shares of White Mountains Insurance. Brian Richards owns shares of the Vanguard Dividend Appreciation ETF.
The Motley Fool owns shares of EMC, Costco, IBM, White Mountains Insurance, and Coca-Cola. Motley Fool newsletter services have recommended buying shares of Coca-Cola, VMware, Costco, and McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.