In February, I recommended five one-month momentum plays to buy as Bitcoin (BTC-USD) prices surged. The world’s largest cryptocurrency is a surprisingly good gauge of bubbly investor sentiment, and our writers at InvestorPlace.com had found several strong candidates to ride the market higher.
Over the following month, these picks would rocket 47%, on average. Even assets with relatively weak fundamentals will go up if investors are bullish enough.
| Ticker | Name | 18-Feb Price | 18-Mar Price | Change |
| PLUG | Plug Power | $ 4.00 | $3.30 | -15.9% |
| SOUN | SoundHoundAI | $3.80 | $8.90 | 133.2% |
| NVDA | Nvidia | $726.10 | $878.40 | 21.0% |
| ETH | Ethereum | $2,881.30 | $3,518.40 | 22.1% |
| SOL-USD | Solana | $112.20 | $196 | 74.7% |
| Average Return | 47.0% |
However, market sentiment has since soured. Bitcoin has lost 18% of its value since peaking in mid-March, and many smaller cryptocurrencies have fallen even further.
There are other signs of growing market fear. On Monday, the CBOE Volatility Index (VIX) surged from its previous Friday low of $15 to over $19.50. (Since 2001, any time the VIX has risen more than 25% in a trading day, the market would go on to underperform its long-term average by an annualized 7.4% over the following 30 days). And in commodities, safe havens like gold are notching all-time highs just as riskier bets like agricultural commodities and lithium are sinking.
That’s predictably caused a mild market panic. Over the past week, investors have yanked $10.3 billion of cash out of the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), the largest one-week outflow since the start of the pandemic in February 2020.
And that’s why Luke Lango has an announcement this week. By modifying his already successful quant system, he’s managed to create an investment tool that outperforms during good times and bad. And in his latest presentation, The Breakout Crypto Project (at 10 a.m. on Tuesday, April 23), he explains how. Sign up now to reserve your spot.
Meanwhile, the writers at InvestorPlace.com – our free news and analysis website – have been busy analyzing crash-proof stocks to buy immediately. Though a full-blown crisis is still unlikely, tactical portfolios should consider pivoting to these far safer bets until market sentiment improves again…
5 Crash-Proof Stocks to Buy Immediately: Bristol-Myers Squibb (BMY)
Shares of Bristol-Myers Squibb (NYSE:BMY) sank 10% this month after analysts downgraded the stock over debt concerns. The multinational pharma firm has $2.8 billion of bonds due this year, and high interest rates will make it far more expensive to refinance these loans. Wall Street expects Bristol Myers to eke out just 1-cent earnings per share this fiscal year.
However, these short-term moves mask a company with otherwise excellent financials. Michael Que, at InvestorPlace.com, sees this selloff as an ideal moment to buy.
In Q4 2023, Bristol exceeded analyst expectations for the top and bottom lines. The company saw revenue increase 1% year-over-year (YOY) to $11.48 billion…
Furthermore, a bundle of three recent multibillion-dollar acquisitions, RayzeBio, Mirati Therapeutics and Karuna Therapeutics, will continue to boost the company’s growth. CEO Chris Boerner expressed particular excitement over the Karuna deal, emphasizing its potential to accelerate Bristol’s business in neuropsychology.
Despite its short-term debt issues, Bristol-Myers Squibb’s diversified drug portfolio generates cash flows in both good times and bad. Operating profits more than doubled during the 2008 financial crisis, and would have shown growth during the 2020 pandemic if not for accounting-related charges. BMY’s debts are also the “good” type; the firm used these loans to finance a 2019 acquisition of Celgene, netting it one of the best drug pipelines in the myeloma (blood cancer) industry.
That makes Bristol-Myers an unusually strong firm to ride out a potential bear market. Drug demand is typically noncyclical, and BMY’s recent decline now gives this conservative stock a great deal of upside. Shares trade at less than 7 times 2025 earnings.
2. Johnson & Johnson (JNJ)
Johnson & Johnson (NYSE:JNJ) joins BMY as a top conservative stock to buy this month. JNJ is a leading healthcare firm that dominates medical devices and several pharmaceutical markets. Its portfolio of devices includes innovative contact lenses and robotic surgical instruments, while its pharma segment hosts several blockbuster drugs.
In a writeup this week at InvestorPlace.com, Rich Duprey goes as far as to call it one of the 3 Best Stocks to Buy to Survive the Coming S&P 500 Crash.
Johnson & Johnson owns a portfolio of billion-dollar treatments including Stelara and Tremyfa for plaque psoriasis, Darzalex for cancer and Simponi for rheumatoid arthritis. Revenue is forecast to grow between 7% and 8% annually with 12% to 13% adjusted profits growth.
Not surprisingly, the pharma stock also has an extended dividend history. JNJ has paid a dividend to shareholders every year since 1944. It has increased the payout for 61 consecutive years and will probably announce yet another raise in the next few weeks.
That’s because Johnson & Johnson is a rare quality-growth play that can do well during good times while surviving the bad. Much like Bristol-Myers Squibb, JNJ saw operating income go up during the financial crisis. And its balance sheet is far healthier too, with only $6 billion of net debts. JNJ will spend less than 3% of its operating income on debt service this year.
Finally, a recent spinoff of its slower-growing consumer products division now puts JNJ on an unusually rapid growth path. Analysts expect free cash flow growth to accelerate from 6% last year to 13% this year and 16% the next.
Fortunately for investors looking to buy, markets have not yet realized this fact. Shares trade at less than 14 times forward earnings, or almost 15% below long-term averages.
3. Coca-Cola (KO)
Shares of Coca-Cola (NYSE:KO) stagnated last year over concerns that weight-loss drugs like Ozempic and Wegovy could cut into its business. Walmart (NYSE:WMT) U.S. CEO John Furner noted at the time that customers were already buying “less units, slightly less calories,” and that sent a chill through the snack food and beverage industry.
Coca-Cola has since traded at a significant discount to its long-term value, with the stock hovering at just 21 times forward earnings (compared to a five-year average of 23.4x).
That now makes it a particularly strong stock to ride any downturn. In an update at InvestorPlace.com this week, Rich Duprey also notes that cheap share prices now mean Coca-Cola sports a 3.3% dividend yield – well above its long-term average. (Share prices and dividends move in opposite directions, assuming no change in dividend payments). Warren Buffett’s Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) alone is set to receive $775.6 million from this soda king.
Meanwhile, the panic over weight-loss drugs has begun to subside. Wall Street analysts have now nudged Coke’s 2025 earnings estimates back to where they started last year – a typically bullish sign. As Duprey notes:
Coke tends to be an all-weather stock. Cans of soda and other beverages are indulgences consumers will enjoy regardless of economic conditions. This is why it continues to thrive, and Buffett will likely never sell his holdings.
Though Coca-Cola has somewhat limited upside, its conservative nature and reasonable dividends makes it an excellent company to buy as market jitters continue to set in.
4 and 5: Valero (VLO) and Exxon Mobil (XOM)
The oil and gas industry is a surprisingly countercyclical one. Prices of the commodity surged in both the 2000 and 2008 stock market crashes, and fell in 2014 just as American companies were picking up steam. High energy prices can often act as a dampener on demand, so the average correlation between stocks and oil has traditionally been close to zero.
That’s why Eric writes this week in Smart Money that you don’t want to overlook oil.
The oil and gas sector has been enjoying a subdued “stealth rally” during the last few years. Since the end of 2021, the S&P 500 Energy Sector sub-index has produced a total return of 92% – more than seven times the S&P 500’s return over the same time frame.
He sees even more gains ahead. In that same update, he picks out two companies, Valero Energy (NYSE:VLO) and Exxon Mobil (NYSE:XOM), as “textbook” cases of deep-value plays.
- Valero: The shares of this bellwether oil refiner have soared 36% year to date, reaching a new all-time high. But even at this record level, the stock is trading for just 7 times earnings, which is half its average valuation of the last 30 years.
- Exxon: Using price-to-EBITDA ratios, the chart shows that Exxon’s valuation has fallen to a record-low 70% discount to the valuation of the S&P Information Technology Sector sub-index.
Essentially, Valero and Exxon are priced as if oil will return to $65 per barrel. Many traders were badly burned in the 2022 bear market, and the backwardation in oil futures show that general bearishness persists today. Valero and Exxon’s low price-earnings (P/E) ratios reflect the sentiment.
However, the oil market is far tighter than many realize. Eric notes that the International Energy Agency (IEA) has trimmed its 2024 supply forecast to 102.9 million barrels per day while raising its demand forecast to 103.0 barrels per day. If these numbers are correct, that would mark the first time since 2021 that the crude market will face an annual supply deficit. The situation could become “extremely tight” by the end of year if OPEC countries donn’t bring back more supply, according to the head of commodities at hedge fund Citadel.
That means Valero’s and Exxon’s profits could remain elevated for longer than most realize. Both firms have large exposures to the upstream (drilling) side of the industry, and so high energy prices directly benefit these firms. Expect a U.S. market panic to pass these companies by.
The Uses of Technical Analysis
Last year at InvestorPlace.com, I wrote a series of articles that analyzed how well technical analysis does in the real world.
The power of these models turned out to be stunning, especially if paired with fundamental data. Investors leave “clues” that give away their sentiment at the time, and these emotions often become self-perpetuating. Rapid buying of risky stocks is a sign of greed, which can spark a market rally that generates even more greed, and so on. Cluster buying of conservative stocks signals a market turnaround, while selloffs can be a sign of fear.
After all, markets are run by people… and people are influenced by a combination of greed and fear.
Fortunately, Luke Lango has distilled this wisdom even further. In his latest presentation, he explains how he’s used this insight to create a quantitative system that takes the technical stage analysis he’s used successfully to pick stocks and modifies it to find cryptocurrencies on the verge of a breakout – tokens that could soar hundreds of percent in a matter of days, weeks, and months.
In fact, Luke tells me, he’s precision-tuned that system to master gains in the crypto market – just in time to reap the rewards of Bitcoin’s Fourth Halving, which, if everything went according to plan, should have occurred this weekend.
And on Tuesday, April 23, at 10 a.m. Eastern, he’ll be unveiling this tool at The Breakout Crypto Project. Investors can leverage this system to potentially win big with cryptos as they enter the most exciting part of this Bitcoin halving-fueled boom cycle.
Reserve your spot for that event here.
On the date of publication, Thomas Yeung held no positions in stocks mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.