If investors have learned anything about 2020, it's to expect the unexpected. This year, we've witnessed the sharpest bear-market decline from a recent high in history, as well as the fastest bounce back to new all-time highs from a bear market low. The idea of timing the market with any consistency has been completely tossed out the window.
However, volatility and uncertainty don't have to be viewed as negatives for the investment community. As long as you have a long-term mindset, wild and unexpected swings lower in the stock market have historically always represented an opportunity for investors to put their money to work.
Best of all, you don't need to start with a fortune to make one. If you have $100 that you can put toward investing, which won't be needed to pay bills or cover emergencies, you have more than enough to begin charting a path toward financial freedom. If the stock market continues to sell off, consider taking $100 and buying the following five stocks.
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NextEra Energy
If your brokerage offers fractional-share investing, this is sort of moot point, but following a 4-for-1 stock split this week, electric-utility stock NextEra Energy (NEE 0.95%) is ripe for the picking.
Though electric utilities are typically a slow-growing operating model, NextEra is an exception to the rule. That's because this company has aggressively invested in green-energy projects and become the leading generator of capacity from solar and wind power in the United States. Not only will this put NextEra ahead of Capitol Hill's legislative curve if a renewable-energy initiative is ever introduced for utilities, but it also brings the company's generation costs way down. Despite a hefty upfront cost, these green energy projects are responsible for NextEra Energy's high-single-digit growth rate.
The company's traditional utility operations (those not powered by renewables) also benefit from being regulated. This is just a fancy way of saying that NextEra can't hike its prices without a state public-utility commission giving it the OK to do so. That might sound detrimental, but it makes cash flow exceptionally transparent and predictable, while also helping the company avoid potentially volatile wholesale electricity pricing.
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Ping Identity
Buying into businesses that are on the leading edge of innovation in the cybersecurity space is another good way to make money over the long term. That's why your $100 might be spent on shares of Ping Identity (PING).
With more businesses than ever having no choice but to move their presence online and/or operate remotely during the coronavirus disease 2019 (COVID-19) pandemic, the door has opened for companies like Ping Identity to thrive. Ping specializes in identity-verification solutions, with its cybersecurity platform leaning on artificial intelligence to grow smarter over time. In other words, the more events Ping's security platform oversees, the smarter it gets at identifying potential threats and requesting secondary verifications before allowing access to enterprise data.
Ping Identity has been hit a bit harder than most software-as-a-service companies during the pandemic, but it also offers intriguing value in an otherwise pricey industry. The company is already profitable, capable of double-digit sales growth in 2021 and beyond, and valued at less than nine times Wall Street's estimated sales for next year. That's a bargain!
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Green Thumb Industries
For a handful of U.S. marijuana stocks, it really doesn't matter what happens with the election next week. An abundance of state-level legalizations, along with the federal government taking a hands-off approach to cannabis regulation, means Green Thumb Industries (GTBIF 3.56%) can show investors the green.
Among major multistate operators, Green Thumb has the third-most-open dispensaries (just over four dozen). However, it holds 96 total retail licenses in a dozen states, suggesting that Green Thumb can deliver substantial organic and inorganic growth in the years to come.
In particular, Green Thumb has acquired its way into the tourist-heavy Nevada market, which by 2024 could lead the nation in cannabis spending per capita. It also has a growing presence in Illinois, which is a limited-license state that opened its door to adult-use weed sales on Jan. 1, 2020.
Perhaps best of all, Green Thumb generates close to two-thirds of its revenue from derivatives (e.g., vapes, beverages, topicals, concentrates, and edibles). Derivatives yield much juicier margins than dried flower, which should give Green Thumb more bang for each revenue buck.
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SSR Mining
A stock market sell-off is the perfect time to consider putting $100 to work in gold stocks. While gold is often viewed as a safe-haven investment during times of uncertainty, current monetary policy and company-specific catalysts make SSR Mining (SSRM 1.12%) quite intriguing.
On a macro level, the Federal Reserve has been clear that it doesn't intend to raise its federal-funds target rate for years. This means interest rates and bond yields will remain at or near record-tying lows for a while. Low yields, coupled with a ballooning money supply -- a result of the Fed's unlimited quantitative-easing measures to support financial markets -- should pave the way for a higher gold price.
On a company-specific level, SSR Mining recently completed a merger of equals with Turkey's Alacer Gold. The combined company should have the potential to easily top 700,000 ounces of gold each year, with an all-in sustaining cost of around $900 an ounce. This would work out to a cash operating margin of around $1,000 per gold-equivalent ounce.
Furthermore, SSR Mining is one of a small handful of gold stocks with a net cash balance. Considering the newly combined company expects $450 million in annual free cash flow through 2022, there's a good chance a dividend or share buyback will be announced soon.
Image source. U.S. Bank.
U.S. Bancorp
Bank stocks might be boring, but they do one thing really, really well: Make money. Among big banks, none has been better at generating profits from its assets than U.S. Bancorp (USB 0.91%).
The interesting thing about this mammoth regional bank is that its conservative approach has spared it the severe downturns experienced by larger money-center banks. U.S. Bancorp has avoided riskier derivative investments and focused solely on growing deposits and loans. The result is that it's been able to emerge from economic downturns much faster than its peers and delivered superior return on assets over the long run.
Just as notable, U.S. Bancorp has witnessed a huge uptick in online and mobile banking over the past two years. Between Q3 2018 and Q3 2020, the total number of loan sales originating from digital transactions nearly doubled from 28% to 54%. In terms of total transactions, 76% were conducted digitally in the September-ended quarter. This online/mobile push will allow U.S. Bancorp to consolidate its physical branches in the quarters that lie ahead and minimize its noninterest expenses.
Put simply, top-tier banks shouldn't be trading this close to book value.
