If the market’s recent volatility has made you more of a trader and less of an investor, you’re not alone. Stocks were never intended to be the stuff of short-term speculation — it just sorta happened. The big pullback from January’s highs only makes things worse, catching a bunch of newcomers off guard. Now many of them don’t know whether they should cut their losses or ride out of the rest of the storm. It’s enough to make you completely change your tack to something decidedly long-term.
With that as the backdrop, here are five true “forever” holdings you can safely step into today while they’re on sale.
1. Generac Holdings
It’s not a household name, though it’s possible your household is (literally) connected to equipment made by Generac Holdings (NYSE: GNRC).
As the name almost suggests, Generac makes backup power generators, though it’s moved well beyond those roots. In step with the growth of solar power, Generac Holdings also manufactures storage systems, allowing its customers — including utility companies — to use electricity at night even when the sun isn’t shining.
These businesses have never been more necessary. The so-called rolling brownouts expected for several states this summer underscore the reality that the nation’s power grid isn’t reliable or powerful enough to serve all consumers all the time. At the same time, the U.S. Energy Information Administration estimates that 46% of any new power production capacity put in place in the United States this year will be solar-based.
Connect the dots. The future of electricity is self-sufficiency and storage of solar power. Generac stock’s halving in price since October’s high is a gift for long-term investors looking for bargains.
It’s not unfair to say Alphabet‘s (NASDAQ: GOOG) (NASDAQ: GOOGL) best, highest-growth days are behind it. The days ahead, however, are still looking pretty good, and certainly better than this stock’s 25% tumble from November’s peak implies.
Alphabet is of course the parent to search engine giant Google. It also owns YouTube and mobile operating system Android. Revenue growth rates for all three platforms are slowly cooling, and will likely never reaccelerate again. Don’t read too much into a mathematical slowdown, though. The slowdown is largely a function of Alphabet’s enormous size; the ever-bigger comparisons make relative growth tougher to muster. On an absolute/dollar basis, the company’s expanding about as much as it ever has. Indeed, Alphabet’s top line has only fallen twice on a year-over-year basis over the course of the past 10 years, and one of those times was the quarter after COVID-19 made landfall in the United States.
The only real threat to Alphabet is a worldwide mass decision by consumers to stop using the internet, abandon their mobile phones, and lose interest in short-form videos. These, of course, are unthinkable possibilities.
With Ford, General Motors, and other carmakers finally getting serious about electric vehicles (EVs), Tesla (NASDAQ: TSLA) is now facing real competition. Ford’s Mustang Mach-E even toppled Tesla’s Model 3 as Consumer Reports’ favorite EV for 2022, while demand for Ford’s all-electric F-150 pickup — which beat Tesla’s Cybertruck to the market — is insatiable.
The rise of these competitors accounts for at least a good-sized portion of Tesla stock’s 30% price pullback since the beginning of the year. We don’t know exactly when or by how much these other EV players will cut into Tesla’s business, but there’s good reason to believe they’ll make a noticeable dent.
The market, however, may be overreacting to the threat. Tesla is not only the only major name in the automobile manufacturing business built from the ground up to make nothing but electric vehicles, but is also still the premier name in an EV market that’s going to offer plenty of opportunity for every player. The United States’ Energy Information Administration believes the number of electric vehicles traveling the world’s roads will swell from roughly 10 million now to more than 670 million by 2050.
4. Zebra Technologies
Of the five unstoppable stocks being examined here, Zebra Technologies (NASDAQ: ZBRA) may be the least well known. Like Generac, however, it’s possible you’re a user — albeit indirectly — without even realizing it. Zebra makes all sorts of products, ranging from bar code scanners to bar code printers to inventory management solutions and more.
It’s not a recession-proof business, but it is a recession-resilient one. Revenue and operating profits barely blipped in the wake of 2008’s subprime mortgage meltdown before quickly recovering, as was the case in 2020 after pandemic-prompted shutdowns made it difficult to do business. Analysts are calling for top-line growth of 5.7% this year and next year, extending a long, steady growth trend, and ultimately putting the company on track to produce record-breaking per-share profits of $21.96 for 2023. The need for its tech is only ramping up as supply chains become more complex and faster-moving, even if this growth potential isn’t evident in the stock’s year-to-date 50% setback.
5. Procter & Gamble
Last but not least, add Procter & Gamble (NYSE: PG) to your list of unstoppable stocks to buy while they’re on sale. This one’s down 17% just since April’s peak, which doesn’t sound too bad until you realize that sell-off has dragged the usually slow-moving stock to new 52-week lows.
You know the company — perhaps even better than you realize. Procter & Gamble is the name behind Luvs diapers, Tide laundry detergent, Bounty paper towels, and Gillette razors, just to name a few products. This product lineup, however, also explains the stock’s recent poor performance. Soaring commodity and freight costs are a challenge for all businesses and consumers, but they’re particularly problematic for makers of low-cost, low-margin products that incur freight charges in nearly every step of the manufacturing and wholesaling process. As P&G explained concerning the quarter ending in March, “gross margin for the quarter decreased 400 basis points versus [a] year ago, 380 basis points on a currency-neutral basis. The decline was driven by 410 basis points of increased commodity costs, 80 basis points of higher freight costs.”
What investors may not fully appreciate is that, despite commentary scoffing at the initial predictions regarding how long it would last, this bout with inflation really is “transitory.” We don’t know exactly when it will ease, but with Procter shares down nearly 20% from their recent high, we don’t need to know exactly when it will ease. In the meantime, there’s arguably no consumer goods company better equipped to handle the high-cost headwind — one of the advantages of Procter & Gamble’s sheer size.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. James Brumley has positions in Alphabet (A shares). The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Tesla, and Zebra Technologies. The Motley Fool has a disclosure policy.