5 Best Stocks to Invest in 2024

The five best stocks to purchase prior to the 2024 economic downturn are covered in this article.

Check out the 14 Best Stocks to Invest in 2024 for a list of additional stocks that are included in this collection.

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5. Costco Wholesale Corporation

69 people own hedge funds.

Membership warehouses are run by Costco Wholesale Corporation in the US,
Puerto Rico, Canada, the UK, Mexico, Japan, Korea, Australia, Spain, France,
Iceland, China, and Taiwan.

It is among the greatest stocks to buy during a recession.

Costco Wholesale Corporation reported December sales of $23.80 billion on January 5; this was an increase of 7% from $22.24 billion during the same month in 2017.

Additionally, the business reported net sales of $82.16 billion for the 18 weeks ending January 1, 2023, up from $76.34 billion in the same period last year.

Ivan Feinseth, an analyst with Tigress Financial, maintained a Buy rating on Costco Wholesale Corporation on December 21 but lowered the firm's price
target to $635 from $678, citing a re-evaluation of the valuation.

Given the company's devoted customer base and strong business model, the analyst sees the recent decline in Costco Wholesale Corporation shares as "a
major buying opportunity," noting that his updated target reflects a
potential total return with dividends of nearly 40% from present levels.

At the end of Q3 2022, 69 hedge funds were long Costco Wholesale Corporation, up from 64 firms the previous quarter, according to Insider Monkey data.

The largest shareholder in the corporation is Ken Fisher's Fisher Asset Management, which has 2.5 million shares valued at $1.20 billion.

In its investor letter for Q3 2022, Cooper Investors Global Equities Fund has the
following to say about Costco Wholesale Corporation:

“The labor market is incredibly tight, and several executives we spoke to cited their struggles with staff retention and keeping competitors from stealing talent.
Particularly industrial enterprises continue to experience record backlogs, and
the easing of supply chain and transportation limitations is just now beginning
to affect delivery schedules.

Regarding inflationary pressures, the vast majority of our holdings have used their dominant market positions and strong stakeholder ties to drive the price through 2022 with little to no impact on profitability.

Obviously, there is a limit to how long this lever can be pulled, but the more seasoned management teams have saved some of their ammunition.

Our encounter with Costco management in Seattle stands out for a number of reasons, but one of them is their repressed potential to raise member prices—something they haven't done in more than five years and are therefore likely to do in 2023.…

We'll revisit our encounter with Costco as our final point. After decades of
incredible execution, the business quality is no secret, but the meeting gave
us renewed confidence in Value Latencies in terms of the growth potential, the
emphasis on increasing customer value, Costco's enormous purchasing power (it buys 30% of the world's jumbo cashews, for instance), and management's
ferocious focus on the business model and cost discipline."

4. PepsiCo, Inc.

Holders of Hedge Funds: 72

One of the most reliable consumer staple stocks to hold during an impending recession is PepsiCo, Inc.

On November 17, the firm announced a quarterly dividend of $1.15 per share, as it had in the past.

On January 6, the dividend was given out. Since 1965, PepsiCo, Inc. has increased its yearly dividend for 50 consecutive years, and the business has paid out quarterly cash dividends continuously since that time.

On December 7, John Staszak of Argus boosted the price target for PepsiCo, Inc. from $195 to $206 while maintaining a Buy rating for the stock.

According to the analyst's research note to investors, the company is
well-managed, offers a solid brand portfolio, and continues to create resilient
growth despite weak demand for several consumer essentials.

At the end of Q3 2022, 72 hedge funds were positive on PepsiCo, Inc., up
from 65 firms in the previous quarter, according to Insider Monkey data.

The company's biggest shareholder, with 7.14 million shares worth $1.16 billion, is Terry Smith's Fundsmith LLP.

In its investor letter for Q3 2022, Lindsell Train has the following to say about
PepsiCo, Inc.: On December 7, Argus analyst John Staszak maintained a Buy rating while increasing the price objective for PepsiCo, Inc. to $206 from $195.

According to the analyst's research note to investors, the company is well-managed, offers a solid brand portfolio, and continues to create resilient growth despite weak demand for several consumer essentials.

“Another
example of these self-reinforcing moats, drawn from the consumer franchises
side of our portfolio, may be helpful at this time to further clarify the
concept. In our opinion, powerful consumer brands may also possess
Lindy-compatible anti-aging qualities. Take into account the possibility that a
company's brands will become stronger and more recognizable the longer it
invests in its promotion and R&D. When a brand is successful, a self-sustaining
feedback loop is created, making it tougher and harder to build a new version
from scratch, increasing entry barriers and, consequently, the likelihood that
the brand will survive. There are several long-lasting portfolio franchises I
could use as examples, but I've chosen PepsiCo because it has some
beautiful deep moats during its 129-year history and partly because we have
strong time-series statistics on it (data bias alert!).

With
Pepsi-Cola, you have the iconic soft drink brand that is popular across
generations and markets, as well as the Frito-Lay portfolio of salty snacks
that accounts for approximately 40% of the global market. That is ten times
more than the next-closest rival and perhaps more than the following 65 rivals
put together. The long-term empirical outcome is Pepsi's dividend record, which
over the past 66 years (as far back as we can go) has compounded at an
annualized rate of 10%. These are unusually powerful global bands with market
shares to match. Pepsi is no longer a start-up that was "in at the ground
floor," but it also wasn't sixty years ago. When he wrote of
"companies which in spite of outstanding prospects of major further growth
are so financially strong, with roots going so deeply into the economic soil,
that they qualify under the general classification of "institutional
stocks'" in 1958 (two years into Pepsi's current winning streak), early
growth investor Philip Fisher captured the essence of the situation. PepsiCo is
a good example of this.”

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3. AbbVie Inc.

Holders of Hedge Funds: 80

The corporate headquarters of AbbVie Inc. is located in North Chicago,
Illinois. Pharmaceuticals are discovered, developed, produced, and sold by the
corporation on a global scale.

On January 6, AbbVie Inc. and Immunome Inc. agreed to collaborate on the discovery of up to 10 new antibody-target combinations for cancer treatment.

It is among the top stocks to think about for recession resistance.

On January 5, Truist analyst Robyn Karnauskas maintained a Buy rating on the stock while increasing the price target for AbbVie Inc. to $180 from $160.

For the target rise, the analyst cited rising prescription and share growth patterns for Skyrizi and Rinvoq, as well as growth in Botox in the aesthetics market.

At the end of Q3 2022, 80 hedge funds were long AbbVie Inc., up from 71
firms the previous quarter, according to Insider Monkey data.

The company is significantly owned by Peter Rathjens, Bruce Clarke, and John Campbell's Arrowstreet Capital, which has a $431.60 million investment.

In their investor letter for Q3 2022, Baron Funds notably mentioned AbbVie Inc. as follows:

"AbbVie Inc. is a pharmaceutical company best known for developing the
immunosuppressant Humira, which is currently the highest-selling medication
ever.

Given the significant primary product risk (patent cliff and generic product launches starting in 2023), AbbVie has expanded its pipeline, shown by the purchase of Allergan.

Shares dropped as a result of disappointing results and signs that older brands were outperforming more recent product introductions, casting doubt on AbbVie's long-term plan.

We think AbbVie will continue to expand because of its strong cash flow profile and exciting upcoming assets.

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2. Bank of America Corporation

Holders of hedge funds: 97

An American international investment bank and holding corporation, Bank of America Corporation, offers financial services to individuals, small and
mid-sized businesses, institutional investors, big businesses, and governments
all over the world.

One of the greatest stocks to purchase this year to hedge against a potential recession is Bank of America Corporation.

On December 5, Bank of America Corporation stated that it would redeem
all $6 billion of its outstanding senior notes with a 3.004% fixed/floating
rate due in 2023.

At the redemption date, the redemption price will be equal to
100% of the notes' principal amount plus accrued and unpaid interest.

On January 3, Jason Goldberg of Barclays maintained his Overweight rating on
shares of Bank of America Corporation, but he reduced his price
objective from $51 to $48.

According to the analyst, net interest margins for large-cap banks should peak in 2023, while deposit betas will rise, loan growth will halt, and loan losses will climb.

At the end of Q3 2022, 97 hedge funds were positive on Bank of America Corporation, down from 99 funds the quarter before, according to Insider Monkey data.

The largest shareholder in the corporation is Warren Buffett's Berkshire Hathaway, which has more than 1 billion shares worth $30.5 billion.

In its Q3 2022 investor letter, Ariel Investment stated the following regarding Bank of America Corporation:

"In the quarter, we started three new positions.

We included the top financial organization Bank of America Corporation, which offers a full range of banking, investing, asset management, and other financial and risk management products and services to individual customers, small and
middle-market businesses, and major organizations.

The current business was created through a number of mergers, including those between the legacy commercial bank and NationsBank, FleetBoston, US Trust, Countrywide Financial, and Merrill Lynch, creating a national banking behemoth and bulge bracket investment firm.

As one of the "Big Four" U.S. banks, it benefits from economies of scale and scale-driven cost advantages that give it significant competitive advantages and the potential for high returns in the largely commoditized banking sector.

A financial crisis survivor, BAC has come
out of it with a strong capital basis and will profit from an environment with
rising interest rates.”

1. UnitedHealth Group Incorporated

Holders of Hedge Funds: 110

UnitedHealth Group Incorporated is a multinational managed healthcare and
insurance corporation based in the United States that conducts business through
the UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx segments.

One of the top stocks to purchase for a portfolio during a recession is UnitedHealth Group Incorporated. Revenue for 2023 is expected to range between $357 billion and $360 billion, according to company guidance.

The $352.95 billion consensus revenue projection.

A.J. Rice of Credit Suisse increased the price objective for UnitedHealth Group
Incorporated on December 7 from $590 to $610 while maintaining his
EPS forecasts and advancing his valuation to 2024.

The stock's analyst maintained an Outperform recommendation.

110 hedge funds were long UnitedHealth Group Incorporated, up from 91 funds in the previous quarter, according to Insider Monkey's third-quarter database.

The majority stakeholder in the company is Rajiv Jain's GQG Partners,
which owns 3.2 million shares worth $1.6 billion.

In its investor letter for the third quarter of 2022, Stewart Asset Management made the following comments on UnitedHealth Group Inc.:

It's also beneficial to consider the Great Recession, which started at the end of 2007 and lasted until the middle of 2009. Our portfolio's four biggest current
holdings fared well over that time.

The earnings of UnitedHealth remained steady. While it posted marginally lower earnings in 2008, it swiftly rose to new highs in 2010, and the stock reacted favorably to this expectation.

Check out the 14 Best Stocks to Invest in 2024 for a list of additional stocks that are included in this collection.

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