Stocks to Buy in December 2024: Top Picks for a Well-Balanced Portfolio

Stocks to buy – As the year nears its end, the stock market once again finds itself at record highs. This recurring trend serves as a reminder of why “time in the market” often trumps “timing the market.” While market crashes are a constant fear for investors, maintaining a diversified portfolio is crucial to weathering any economic headwinds. In this article, we’ll explore three stocks to buy in December 2024 that remain undervalued despite the market’s lofty levels. These stocks present strong potential for growth heading into 2025.

Why “Time in the Market” Matters

Stocks to buy – Investors often attempt to predict market movements, but even the greatest minds in investing, like Warren Buffett, have sometimes stayed on the sidelines awaiting crashes that never came. Instead of trying to time the market, staying invested in quality stocks with strong fundamentals often yields better results. Building a diversified portfolio ensures stability during volatile periods. Now, let’s jump into three stocks to buy in December.

1. Alphabet (GOOGL)

Ticker: GOOGL

One of the “Magnificent 7” tech behemoths is Alphabet, the parent company of Google. However, unlike its peers, Alphabet appears undervalued. Its forward price-to-earnings (P/E) ratio of 18.9 is significantly lower than other tech leaders like Tesla (101.9) and Amazon (33.4). This makes Alphabet the cheapest among its peers despite consistent earnings growth.

Why Alphabet is a Top Stock to Buy

1. Earnings Growth: Alphabet’s earnings are expected to grow by over 15% annually for the next few years.
2. Valuation Discounts: Over the past five years, Alphabet’s average P/E ratio was 25.7. The current 18.9 P/E represents a substantial discount.
3. Free Cash Flow Strength: Shares trade at 16.7 times free cash flow, below the five-year average of 17.9.

Risks and Rewards

Alphabet is facing a Department of Justice (DOJ) lawsuit that could force it to divest assets like Google Chrome. However, much of this risk appears priced into the stock. Analysts rate Alphabet as a strong buy, with a 12-month price target of $208, implying a 23% upside from current levels.

2. Nike (NKE)

Ticker: NKE

Nike, a global leader in athletic footwear and apparel, is in the middle of a turnaround story. The stock has been underperforming, down 30% over the last 12 months. Despite the slump, Nike offers significant potential for long-term investors.

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Why Nike is a Top Stock to Buy

1. Leadership Overhaul: Nike has brought back Elliot Hill as CEO. His return is expected to improve morale and drive innovation.
2. Technical Support: Nike’s stock has tested the $70 level multiple times and bounced higher each time, indicating strong support.
3. Valuation Upside: Nike trades at a forward P/E of 24.9, far below its five-year average of 34.2.

Patience Required

While Nike is not a quick-rebound stock, its new leadership, technical setup, and discounted valuation make it an attractive option. Analysts have a 12-month price target of $95, implying a 20% upside from current levels.

3. Coterra Energy (CTRA)

Ticker: CTRA

Coterra Energy is an intriguing play in the energy sector, especially with oil and gas back in focus. The stock has gained 15% since election day and currently trades with a market cap of $20 billion. Energy stocks like Coterra could benefit from policy changes in 2025.

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Why Coterra is a Top Stock to Buy

1. Dividend Strength: Coterra offers a 3.2% dividend yield, with a five-year dividend growth rate of 19%.
2. Cheap Valuation: Shares trade at a forward P/E of 9.1, well below their five-year average of 10.
3. Energy Sector Tailwinds: With renewed political focus on oil and gas, Coterra is positioned to benefit from higher demand and favorable regulations.

Balanced Growth and Income

Coterra combines steady dividends with potential capital appreciation. Analysts rate the stock as a strong buy, with a price target of $32, suggesting a 20% upside.

Diversification is Key

Stocks to buy – Even with these strong candidates, diversification remains critical. Allocating your portfolio across different sectors can help minimize risks and maximize returns. Alphabet offers exposure to technology and advertising, Nike provides a play on consumer discretionary, and Coterra adds energy diversification. Together, these stocks to buy can bolster your portfolio heading into 2025.

Advice for you :

Stocks to buy - This article is just for information purpose. So if you want to make any kind of investment, please consult the experts yourself. Because if you make any kind of loss or profit, then we are not responsible for that. And to see such useful information at the right time, visit https://mymoneymates.com

Conclusion

Stocks to buy – The stock market’s record highs can be intimidating, but they also offer opportunities. Alphabet, Nike, and Coterra Energy stand out as undervalued picks for December 2024. Each has strong fundamentals, attractive valuations, and growth potential. By maintaining a diversified portfolio and staying invested, you can navigate any market challenges.

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