3 stocks to buy and hold for 2 years


Investors looking for shares to buy and hold for two years should try to buy the shares of profitable companies. Such investors should also try to find names that are ready to take advantage of very strong trends over the next 24 months.

Meanwhile, I continue to believe that many other commentators are significantly exaggerating the risk of a recession. As I explained in a previous column, the high savings level of the consumer and the strong labor market should keep consumer spending high and avoid a recession.

Finally, there has been much commentary on how the current economic environment resembles the 1970s. But there are also many similarities with 1994, when the Federal Reserve implemented rapid rate hikes.

As in 1994, we are currently about two years away from an economic downturn, in the midst of major technological advancements, and we have a significant, positive macroeconomic catalyst. Ironically, globalization was the main macro-catalyst then, while now it is the construction of many factories in the US

So in the next two years I think there’s an excellent chance that we’ll have a “soft landing” like we did in 1994.

Three stocks that investors with a two-year horizon should buy to take advantage of the current environment are:

ALB albemarle $223.18
JPM JPMorgan $117.05
BKNG Booking.com $1,915.28

Albemarle (ALB)

Albemarle (ALB) logo on a mobile phone screen

Source: IgorGolovniov/Shutterstock.com

Amid extremely strong demand for lithium, the company increased its annual turnover and earnings guidance twice in May. After the second hike, the lithium miner expects its 2022 earnings per share, excluding certain items, to come in at $12.30-$15.00, compared to its previous estimate of $9.25-$12.25. And Albermarle now expects to generate $5.8-$6.2 billion in revenue, well above its previous expectation of $5.2 billion to $5.6 billion.

“We now expect adjusted EBITDA for the full year 2022 to be more than 160% higher than last year based on favorable market dynamics for our lithium and bromine businesses,” the company said:†

Goldman Sachs recently warned that lithium prices could fall over the next two years amid a glut of metal. But Benchmarkanother company, noted that miners often fail to meet their production targets. while the lithium used in batteries is not easy to make.

I would add that, in addition to EVs, lithium-ion batteries are increasingly being used as a means of storing electricity for homes and businesses. And the EV revolution will accelerate tremendously in the next two years. In light of all these points, I don’t expect lithium prices to fall much or not at all by the end of 2024.

JPMorgan (JPM)

Chase Bank logo and window display

Source: Daryl L / Shutterstock.com

JPMorgan (JPM) has a small trailing price-earnings ratio of only 8.5, which is 10% below the banks’ median P/E ratio of 9.5. And the latest statistic is probably pretty depressed because of the ubiquitous concerns about a recession.

In addition, like all banks, JPMorgan should benefit meaningfully from rising interest rates, and the discount on credit card fees averaged only 1.2% between March and Mayj.

On May 23, the bank raised its 2022 “net interest income {guideline to} more than $56 billion, up from its previous forecast of $53” billion+. And, encouraging both JPM stocks and equities in general, the bank added that “”the US economy remains fundamentally strong despite recent mixed data.”

Requested the guidance increase Societe Generale to raise its rating on JPM shares to ‘buy’. The company wrote: “There is still uncertainty over {share buybacks}” This year, in our view, is likely to come under pressure in the near term, although we believe JPM can earn its way back to stronger capital ratios and shareholder returns in the medium term.”

As a mid-term winner, JPMorgan is a very good name to hold for two years.

Booking participations (BKNG)

a person opens Booking.com on a smartphone

Source: Denys Prykhodov / Shutterstock.com

with a lot consumers spend a lot on travel this year, Booking Holdings, one of the world’s largest online travel agencies, should be a very big beneficiary of that trend.

And if alpha search columnist Luca Socci pointed out, unlike many other companies in the travel industry, that Booking’s margins will not come under direct pressure from high fuel prices.

In the company’s first quarter reported gross bills of $27 billion, which set an all-time quarterly record for the company. “Despite an uncertain macroeconomic environment, we have seen continued strengthening in global travel trends so far in Q2 2022, and we are gearing up for a busy summer travel season ahead,” said Glenn Fogel, CEO of Booking. .

Booking is in advance P/E ratio is 19, well above the industry median of 11. But given Booking’s strong position in the industry and the industry’s strong recovery, I consider the stock’s valuation attractive. In addition, I think the travel industry recovery will take longer than many think and may remain intact for the next two years.

After not traveling much for the next two years, I think many consumers will want to make up for this in the next 24 months. In addition, those who for some reason cannot travel much this summer or in the upcoming holiday season, will probably do so next summer or during the next holiday season.

At the date of publication, Larry Ramer had no (direct or indirect) positions in the securities referred to in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publication Guidelines†

Larry Ramer has spent 15 years researching and writing articles on US stocks. He was employed by The Fly and Israel’s largest business newspaper, Globes. Larry started writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks were GE, solar stocks and Snap. You can reach him on StockTwits at @larryramer.

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