The stock market has performed brilliantly in 2024 and S&P 500 Up 25% year to date. Fortunately for investors looking to capitalize on the market, things cooled off in December, with the S&P down 1% since the start of the month. Looking even deeper, some companies face challenges that have dragged down their stock prices.
Anticipating a share price discount is only one part of the equation for finding the best stocks to buy. Investors should also look for companies with competitive advantages and solid track records of success. Short-term challenges have created opportunities to buy shares at a discount in both these companies.
For investors with $1,000 to put to work in the market, buying one or both of these stocks may be a wise decision.
If you have opened a PDF file, you have used one adobe (NASDAQ: ADBE ) product While this ubiquitous file type may be Adobe’s most popular application, it’s the company’s creative suite that is the primary driver of financial results. Products like Photoshop and Premiere Pro are the industry standard for creative fields, although competition has increased over time.
Evidence of Adobe’s market position is evident in its financial results. Like all businesses, there are occasional short-term bumps in the road, but over the long term, Adobe has been remarkably consistent. Consider revenue, net income, and Free cash flow In the last five years.
While Adobe’s track record is impressive, investment is about the future and the biggest potential obstacle to Adobe’s market dominance. artificial intelligence (AI). Many of the tasks that creators perform within Adobe’s products can already be handled by AI, and AI’s capabilities are growing every day.
Adobe has chosen to embrace this new technology and is working hard to integrate its AI product, Firefly, into its software suite. Rather than seeing AI as a replacement for Adobe’s products, the company believes it can aid the creative process by taking care of some of the more menial tasks for creators to be creative.
Time will tell how successful this strategy will be, and the market is waiting to find out. Adobe currently trades for a price-to-earnings (P/E) ratio of 36. While that’s not a cheap multiple, it’s below Adobe’s five-year mean P/E ratio of 47. For investors who believe in harnessing the power of Adobe AI, rather than being disrupted by it, today’s price may prove to be a bargain.
Like Adobe, the Dutch manufacturer ASML (NASDAQ: ASML) It is the leader in the industry. ASML manufactures the lithography machines necessary to manufacture all semiconductor chips. When it comes to the most advanced semiconductors, ASML is the only company in the world that manufactures the extreme ultraviolet lithography (EUV) machines necessary for those cutting-edge chips.
