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Top 5 Stocks to Buy Now for Long-Term Investors

Mohit Oberoi, CFA - Author
By

Aug. 12 2022, Published 9:30 a.m. ET

U.S. stocks have rebounded sharply from their June 2022 lows and after July, August is looking like yet another good month for markets. What are the top five stocks that long-term investors can buy now as markets are still below their all-time highs?

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While U.S. stocks have rebounded, not everyone is convinced that the rally will be sustainable. Some see it as a bear market rally and forecast that stocks will come crashing down in the coming months. However, when it comes to buying stocks for the long term, especially those which are secular growth stories, “time in the market is more important thant timing the market.”

These are the top five stocks to buy now.

If you are a long-term investor, willing to hold stocks for years, the following are the top five stocks to buy now.

  • Amazon (NYSE: AMZN)
  • SoFi (NYSE: SOFI)
  • Berkshire Hathaway (NYSE: BRK.B)
  • Tesla (NYSE: TSLA)
  • Disney (NYSE: DIS)
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Amazon could be worth a lot more.

Amazon is among the most successful U.S. companies. Redburn analyst Alex Haissl thinks that AWS, which is the market leader in cloud, could alone be worth $3 trillion. Currently, the company is valued at less than $1.5 trillion.

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Amazon is among the best stocks to buy for the long term considering its leadership in e-commerce and cloud. It also has a growing digital ad and streaming business, whose prices it has raised in 2022. At these valuations, Amazon looks among the top stocks to buy now.

SoFi is a long-term growth story.

With fellow fintech companies witnessing a growth slowdown, SoFi stands out with its over 50 percent revenue growth. The business has generated a positive adjusted EBITDA for eight consecutive quarters and the bank operations posted a GAAP profit in the second quarter of 2022.

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SoFi’s bank charter could be a key driver for the company as it's helping it lower its cost of funds and improve margins. The company is growing its member count and adding more products and services to the platform. SoFi intends to become the one-stop financial shop for members and is one fintech stock to buy for the long term.

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Berkshire Hathaway stock can outperform the S&P 500.

With its diversified business, Berkshire Hathaway is another top stock to buy now. The company invested billions of dollars of its cash in the first quarter as chairman Warren Buffett took advantage of the market crash. The stock can outperform in the long term and looks like a good buy after having fallen sharply from its 2022 highs.

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Tesla stock is a solid pick for investors.

Tesla stock has rebounded from its lows. The company lost production in China in the second quarter and lost its position as the world’s largest EV (electric vehicle) company. However, Tesla expects its deliveries to rise at a CAGR of over 50 percent over the long term and has built two Gigafactories in Berlin and Texas.

With most startup EV companies witnessing production issues, Tesla stands out with its almost impeccable execution and profitable operations. It has been sustainably profitable for almost three years now unlike other EV companies that are posting massive losses.

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Disney looks like another top stock to buy now.

Disney looks like another top stock to buy now. The company’s total streaming subscribers across all platforms have reached 221 million, which is above Netflix. The company has also announced a price hike for its streaming service. Disney did lower the fiscal 2024 forecast for Disney+ subscribers by 15 million to between 215 million and 245 million but said the business would become profitable by that year.

Disney offers the best of traditional media, streaming, and theme parks. The company is yet to restore the dividend but at these price levels, it is among the best stocks to buy now for long-term investors.

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