There are always stocks to buy. Only which stocks—or types—are considered. Investors must determine the optimal risk-reward possibilities. Searching for a true forever holding makes this process harder. These names must be in an eternal business. These firms must be flexible.
To that aim, here are three value stocks you can buy and hold forever for $500. You may also want to act soon. Value equities may beat growth stocks for a while as interest rates remain high.
1) Bank of America It's challenging to be in banking right now. Banking demand is falling due to economic uncertainty, and more loans are delinquent or defaulting. New York Community Bancorp's declaration of "material weakness" in its loan assessment process led to the CEO's removal, evoking last year's collapse of SVB Financial's Silicon Valley Bank and First Republic Bank.
Don't overthink this noise. Nothing is new to banks; they've overcome it before. Business cycles are predictable. Specific causes and responses are predictable.
That benefits Bank of America (NYSE: BAC) and its shareholders. As one of the nation's largest and best-capitalized banks, it can weather the storm. Despite a 9% revenue drop this year, earnings are likely to improve and then rise again next year on 5% top-line growth. There's a reason BofA shares are doing well lately. The banking industry may turn around faster than expected.
Consider corporate underwriting green shoots. EY (previously Ernst & Young) reports that first-quarter global initial public offerings were down 7% but fundraising proceeds were up 7%. That improvement precedes Morgan Stanley's 2024 prediction of a 50% increase in corporate dealmaking.
Of course, investment banking is only a small part of Bank of America. Most business lines fluctuate together. Shares of BofA cost 11.7 times this year's estimated $3.14 per share earnings.
2) Kinder Morgan Think again if you think solar and wind will reduce oil and gas use. Oil consumption is expected to peak by 2028, yet we'll still consume more crude in two decades. The U.S. Energy Information Administration expects petroleum to remain the world's largest energy source until 2050 due to an increasing population and power demand.
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