3 Strong Stocks for a Weak Market
Stocks saw a pretty big decline last week, with the S&P 500 falling 2.6 percent and the Nasdaq Composite falling 3.1 percent. However, the decline is not universal. There are several stocks that are holding up just fine, and even breaking out — they are of more defensive companies that will not see a significant earnings decline in a recession. Investors who are concerned that the market may continue to fall should consider taking positions in these names.
1. McDonald’s (NYSE:MCD)
Shares in the world’s largest restaurant chain rose 1.44 percent on the week, and they are outperforming the S&P 500 this year by about 4 percent. While the market was flying high last year and investors flocked toward growth stocks, they sold shares in this company to do so. As a result, McDonald’s shares spent 2013 consolidating. Nevertheless, the company has been providing investors with stable earnings, a nice 3.25 percent dividend, and a modest yet effective stock repurchase program.
With investors looking to retain their equity exposure in a weak market environment, they will flock to names such as McDonald’s. It’s not going to soar, but McDonald’s stock is a good place to store your wealth until bargains begin to arise in the higher-growth names that have been dragging the market lower.
Investors looking to take a position should note that the stock’s 50-day moving average is about to cross above its 200-day moving average, which is very bullish. This price point, about $96.25, is also a reasonable entry point, with the shares currently trading at $99.29.