4 Investment Ideas Amongst the Sell Off

A generic image of a pen on a chart
Credit: Shutterstock photo

Without a doubt, days like yesterday and for that matter, the past week or so can be very unsettling for any investor. The key is to have an investing plan and a source for solid investment ideas. These two simple rules will allow for intelligent additions to one's personal portfolio during times of market tumult. Zacks Rank #1 stocks provides a great tool set for an investor to make those intelligent additions. I believe you should spread your investments amongst sectors and use times like these to add quality companies who have been rated #1 by Zacks.

I have 4 stocks today that fit that bill and would add to portfolios at or near today's closing prices. If you were so inclined, I would suggest buying a half position in these names and add the other half 5-10% lower from here in case the selling isn't over. Hang in there, the stock market will stabilize as the move higher in rates decelerates and Zacks Rank #1 stocks will improve your portfolio's performance. Remember, the market at various times gives investors the opportunity to pick up solid stocks at advantageous valuations, this very well may be one of those times!

(LM) $37.79: Legg Mason is a Baltimore based investment manager with nearly $790 billion under management. LM provides a breadth of services including asset management, securities brokerage and investment banking. The stock is trading at a slight discount to its industry peers and a solid discount to the S&P. The stock yields a solid 2.8% dividend and closed today near the lower part of its 52 week range, which should provide a nice entry point for investors.

Earnings estimates are heading higher with a 28.4% upward revision to the current fiscal year. The company's acquisitions over the past few years should propel top line revenues. All in all, this solid financial with a Zacks #1 rank, improving earnings estimates and a higher interest rate environment should prove to be a solid addition to the portfolio.

(STX) $47.44: Seagate Technology is a Computer and Technology company whose main business is storage devices. Seagate's latest deal with Toshiba will help it better compete with Western Digital in the hard disk drives (HDD) arena. The company is expecting higher revenues and increased margins as it improves operational efficiencies. With the stock close today, the price is about 10% above the midpoint for its 52 week range.

The stock sports a very healthy 5% dividend yield and very importantly, earnings estimates include a 21.2% upward revision for this fiscal year. On a valuation basis, the stock trades cheaper relative to its industry group and versus the S&P as well. This technology stock with a Zacks #1 rank trading at these levels is worthy of being added to portfolios.

(AZO) $718.57: AutoZone, the company that even Amazon can't destroy! This stock was on a wild ride of its own long before this recent market sell off. Many analysts on the street had begun to talk about Amazon intruding on the turf of this automotive parts supplier but AZO has proven to have an incredible mote, tremendous management and very strong cash flows. As the average car age begins to push toward 11.5 years old, the demand for AZO's parts and services increases as well. Earnings estimates are rising to the tune of 6.64% for the current fiscal year and again, this stock trades at a discount to its peer group and the S&P.

And although AZO does not pay a dividend the company uses its prodigious cash flow to purchase its own shares amounting to nearly $353m in the fiscal first quarter at an average price of $590, well above today's closing price. In addition to the shares purchased already, the company had nearly $471m of dry powder at the end of the quarter for further repurchasing. Although AZO is only off its 52 week range by about 10%, a purchase near these prices could provide a nice lift to your portfolio.

(HUBB) $129.65: Hubbell designs, manufactures and sells electrical and electronic products to various industrial and commercial markets. The company enjoys not only a Zacks #1 rank but also is #1 in the Zack's Industry Rank. Earnings estimates for the current fiscal year are trending 16.5% higher and the stock trades at an industry valuation along with its Manufacturing peers. The stock closed today at nearly the exact midpoint of its 52 week range and you receive a healthy 2.32% dividend yield while you wait out the stock's move higher. Year to date the stock is down 1.88% while the average manufacturing stock is down approximately 7% so a nice relative out performance for a very strong stock.

Hubbell could also benefit mightily if there were to be a meaningful infrastructure bill passed by the US Congress this year. Hubbell could well prove to be a good building block for your portfolio, especially at these prices.

The markets are convulsing and gyrating not due to economic fundamentals and solid corporate earnings but rather because of mechanical adjustments being made to global portfolios. The move higher in rates will abate soon enough and the inventory of short volatility hedging will run its course as well. Have your game plan, include solid additions to the portfolio like the Zacks #1 ranked stocks above and in time, these turbulent market periods will subside.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Seagate Technology PLC (STX): Free Stock Analysis Report

Legg Mason, Inc. (LM): Free Stock Analysis Report

Hubbell Inc (HUBB): Free Stock Analysis Report

AutoZone, Inc. (AZO): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics

Investing Stocks

Latest Markets Videos


Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

Learn More