Everything MoneyEverything Money Blog
Join EM
Log In

20 stocks that I’m absolutely going to buy during the next market crash

20 Stocks I'm Buying During The Stock Correction

By Paul Gabrail
|
Blog Picture

Hey everyone! Today, I'm diving into the 20 stocks that I’m absolutely going to buy during the next market crash—if, and this is crucial, they hit the price I need them to. Let’s get right into it.



Stock #1: Adobe


I’ve said this before, and I’ll say it again: the only rival that comes close to Adobe in terms of quality software is Microsoft. They’re in different markets, sure, but Adobe is an incredibly high-quality business. The stock is down 3% today, on what’s been a rough day in the market. Adobe hit an all-time high of $700 back in November 2021. Less than a year later, in September 2022, it plummeted to $274—a nearly 70% drop! This just goes to show that in the short term, stocks can be a voting machine, and even high-quality businesses like Adobe can experience bear markets.


Key Metrics:

  • Market Cap: $230 billion
  • Enterprise Value: $237 billion
  • Free Cash Flow: Over $6 billion annually

Adobe’s 88% gross margin is even higher than Microsoft’s. Their return on invested capital sits between 20% to 25%, which is outstanding. Although Adobe doesn’t pay a dividend, it’s been transitioning brilliantly from CD-ROMs to a subscription-based online model, which has been the future of software.

Looking at Adobe’s eight pillars, it checks almost all the boxes. One thing I love: they generate significantly more free cash flow than net income—$6.3 billion in free cash flow versus $4.8 billion in net income. Analysts predict earnings per share to grow from $18 to $30 over the next few years, with revenue growth in the double digits.

Now, let’s pull up the stock analyzer tool. In my last 10-year analysis of Adobe, I used:

  • Revenue Growth: 6%, 10%, and 14%
  • Profit Margin: 26%, 29%, and 32%
  • Free Cash Flow Margin: 38%, 40%, and 42%
  • PE and Price to Free Cash Flow: 18, 21, and 24

With these inputs, I got a low price of $250 to $370, a high price of $793, and a middle price of $430 to $587. If someone told me they were buying Adobe today, I wouldn’t blame them. But is it cheap enough? I’m not sure. If the stock price falls, you better believe I’ll be buying as much as I can. Remember, if it falls in price, that doesn’t mean your thesis is wrong—it could be due to a million reasons. Just look at how Adobe’s stock fell from $700 to $275 in less than a year during a bear market. You’ve got to be ready to act.



___


Stock #2: Microsoft

Obviously, I’m joking when I call Microsoft “Adobe Jr.,” but this $3 trillion company is a titan in its own right. Microsoft has a 70% gross margin and a 35% profit margin, spitting out cash like no other. I use OneDrive over Google Drive because I find it far superior.

Microsoft’s stock recently dropped from a high of $468 to $397. Year-to-date, it’s still up 7%, but down 15% in the last month. The eight pillars look similar to Adobe’s—strong fundamentals with a few valuation concerns. They’ve only bought back 2.3% of shares, which I hope means they’re waiting for a better market environment to do more.


Key Metrics:

  • 5-Year Free Cash Flow: $6.3 billion
  • 5-Year Net Income: $4.8 billion
  • Revenue Growth: 12-15% over the next few years

Using the stock analyzer tool, I assumed:

  • Revenue Growth: 6%, 9%, and 12%
  • Profit Margin: 32%, 34%, and 36%
  • Free Cash Flow Margin: 38%, 40%, and 42%
  • PE and Price to Free Cash Flow: 18, 21, and 24

This gives me a low price of $200 to $240, a high price of $500 to $525, and a middle price of $325 to $350. I’ve set my watchlist alert at $325, not as a buy point but as a signal to start doing more research and potentially selling puts at lower prices.



___


Stock #3: Google (Alphabet)

Google, or as I like to call it, “The Googly Mly,” recently dropped from an all-time high of $193 to $165. This $2 trillion company owns the top two search engines in the world—Google.com and YouTube.com. Google is an advertising giant, and there’s still massive potential for economic growth in regions like Africa and Asia, which could drive ad revenue higher.


Key Metrics:

  • Free Cash Flow: $60 billion annually
  • Debt: $20 billion (which they can pay off in half a year)
  • Return on Invested Capital: High and improving

Google’s eight pillars are strong, with double-digit revenue growth expected over the next few years. My stock analyzer tool inputs for Google:

  • Revenue Growth: 6%, 9%, and 12%
  • Profit Margin: 22%, 24%, and 26%
  • Free Cash Flow Margin: 38%, 40%, and 42%
  • PE and Price to Free Cash Flow: 18, 21, and 24

This gives me a low price of $130, a high price of $300, and a middle price of $200. When I analyzed this stock three years ago, my low price was $80, which just shows how much the fundamentals have improved.



___


Stock #4: Cintas Corporation

Shifting gears from tech, let’s talk about Cintas Corporation. It’s not a sexy company, but I love it. Cintas is based in Cincinnati, Ohio, and they’re known as “the uniform people.” They’re driving the American economy from behind the scenes, handling everything from uniforms to fire extinguishers to cleaning rugs. This company hit an all-time high of $774 just last week, but back in September, it was as low as $475.


Key Metrics:

  • Dividend: 7%
  • Gross Profit Margin: 48%
  • PE and Price to Free Cash Flow: Higher than Adobe, Google, and Microsoft

Cintas is a simple, boring business that’s probably going to be around for a long time. However, it’s currently selling at a premium that I believe is unjustified. In my stock analyzer tool, I used:

  • Revenue Growth: 3%, 6%, and 9%
  • Profit Margin: 13%, 14%, and 15%
  • PE and Price to Free Cash Flow: 16, 19, and 22

This gives me a low price of $192, a high price of $430, and a middle price of $288. If you bought it today at $740, based on my assumptions, you’d have a negative return. This is a prime example of why you sometimes need to be patient and wait for the right price.



___


Stock #5: Intuit (QuickBooks)

Finally, let’s talk about Intuit, the makers of QuickBooks. QuickBooks has made my life so much easier, and I’m a big fan. Intuit is close to its all-time high of $717, with a 52-week high of $676. However, it did drop to a low of $339 recently.


Key Metrics:

  • Dividend: $1 billion annually
  • Free Cash Flow: $5 billion
  • Net Income: $3 billion

Intuit’s gross margin is 78%, and I’m confident this company will be around for a long time. But remember, just because I love a product doesn’t mean I’m going to buy the stock at any price. In my stock analyzer tool, I used:

  • Revenue Growth: 5%, 8%, and 11%
  • Profit Margin: 17%, 19%, and 21%
  • PE and Price to Free Cash Flow: 18, 21, and 24

This gives me a low price of $180, a high price of $700, and a middle price of $300 to $460. It’s on my watchlist at $450.



Other Stocks on My Watchlist


Here’s a quick list of the other companies I hope to own in the future:

  • Meta
  • Berkshire Hathaway
  • Apple
  • Visa
  • Mastercard
  • Home Depot
  • Lowe’s
  • McDonald’s
  • Ferrari
  • Louis Vuitton
  • Sherwin-Williams
  • Otis Elevator Company
  • Costco
  • TJ Maxx
  • Johnson & Johnson
  • Procter & Gamble
  • Hershey Corporation




  • Everything Money is Not an Investment Advisor: Everything Money (including Paul, Mo, and Any other person including, but not limited to, other staff members, guests, personalities, etc.) is not an investment adviser, and it is not registered as such with the U.S. Securities & Exchange Commission or any other state or federal authority under the Investment Advisers Act of 1940 or any other law. The investments and strategies discussed in Everything Money’s YouTube videos and on Everythingmoney.com are not and should not be considered investment advice and may not be suitable for you. They do not take into account your particular investment objectives, financial situation, needs, or personal circumstances and are not intended to be specific to you. Before acting on any investment or strategy discussed, you should always do your own research and make your own independent decision about whether it is suitable for your particular circumstances. You should also consider seeking advice from your own legal, financial, tax, accounting, or investment advisers. Everything Money does not provide such advice.

    READ THE FULL DISCLAIMER HERE: https://everythingmoney.com/disclaimer