5 of the Best Stocks to Buy for March
While markets didn't look so appetizing heading into 2019 -- stocks had corrected sharply in previous months and some market-watchers were wary of recession -- the cold months of winter have been red hot for Wall Street. In the first two months of the year the S&P 500 gained a remarkable 11 percent.
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With a start like that to the New Year, here are the best stocks to buy for March:
-- NXP Semiconductors (ticker: NXPI)
-- The Progressive Corporation (PGR)
-- Shopify (SHOP)
-- International Business Machines Corp. (IBM)
-- Applied Materials (AMAT)
NXP Semiconductors
First on the list is an appropriately hot name for a hot market: NXP Semiconductors, the global chip powerhouse whose products are integral in areas like connected cars, radio frequency identification, and the so-called "internet of things".
Named as one of the 10 best stocks to buy for 2019 after a failed merger left shares at unconscionably low levels, NXPI has lived up to its high expectations thus far this year; shares gained nearly 30 percent in the first two months of the year alone.
Never fear, though: NXP is still a cheap stock, trading at less than 14 times earnings and 10.5 times forward earnings.
The Progressive Corporation
While not exactly in the most exciting line of business, property and casualty insurance giant Progressive is nonetheless a great-looking stock to buy for March.
Like NXPI, PGR has short-term momentum on its side, with shares up roughly 20 percent through February. More importantly though, long-term investors should be pleased with Progressive's fundamentals and its growth outlook: net premiums written (NPW) surged 18 percent in the fourth quarter, and analysts expect NPW growth around 11 percent this year.
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Meanwhile, Progressive plans to hire 10,000 new employees this year to supercharge its growth, and a 3.5 percent dividend yield gives it some downside protection.
Shopify
And now for something a little less bland: high-growth tech stock Shopify, which has been growing by leaps and bounds for years now, and has a valuation that reflects as much.
The $20 billion e-commerce platform, which offers cloud-based solutions for small- and medium-sized merchants who want to set up online stores, trades for a whopping 18 times sales and more than 200 times forward earnings.
That said, Shopify's meteoric valuations have stood up for some time now, and with revenue expected to grow by roughly 40 percent in 2019, investors are betting that by plowing everything back into the business SHOP can keep up its impressive growth.
International Business Machines Corp.
The penultimate name on March's best stocks to buy list is IBM, the storied blue-chip computing behemoth. While Big Blue's struggles to find revenue growth are notorious by now on Wall Street, the company's fourth quarter earnings were much better than expected, and IBM stock gained over 20 percent in the first two months of 2019.
Despite the rally, shares are still down about 10 percent year-over-year, and a price-earnings multiple of 12 doesn't exactly scream "overvalued." Nor does IBM's 4.5 percent dividend, which gives shares a nice little cushion for potential pullbacks.
Strong guidance, as well as impressive growth in its strategic imperatives unit (consisting of cloud, analytics, social and mobile) give a sense of returned hope to the old school tech leader.
Applied Materials
Last but not least, Applied Materials, equipment supplier to the semiconductor industry, rounds out the list of attractive stocks to buy for March. Like several others mentioned above, AMAT pays a nice little dividend (2 percent), and by several measures is the most conservatively valued stock on the list.
Trading for just 10 times earnings, and boasting a price-earnings-growth ratio of 0.91, the fundamentals are flashing "buy" for this name. Although analysts do expect revenue declines in 2019, it looks like much of the bad news has been factored in (and heavily) to AMAT's share price.
Technical analysts should like this name too, as shares have rebounded nicely from 52-week lows in December.
