There are many intriguing stocks out there, and that often makes it very difficult to pick just one or two. After all, most people can’t afford to buy every stock that looks attractive, just like you can’t afford to pick up every item you like on a trip to your favorite store. But that’s okay. It’s okay to select one or two great stocks if possible. This small step should get you on your way to building a rock-solid portfolio. And ultimately, this strategy will help you achieve the goal of owning dozens of truly great companies that can help you grow your wealth in the long term.
So considering this, let me help you along this path by telling you about two of my favorite stocks to buy today. If I could only buy two stocks in the last half of this year, I would choose this one. That’s because they are both trading at reasonable prices given their future prospects, and they should benefit from an improving economic situation. Let’s take a look at them.
1. Amazon
Amazon (NASDAQ: AMZN) has already established itself as a leader in two fast-growing markets: e-commerce and cloud computing. An e-commerce giant, the company sells both basic and mass-market products and has expanded its Prime subscription program to more than 200 million members. This is crucial because members, who pay for benefits such as free same-day or same-day delivery, are likely to use the service as often as possible to get their money’s worth.
And Amazon makes sure they want to stay by keeping prices low and making delivery faster than ever. The high member retention indicates that these efforts are working. According to Statista, in the first three months of last year, 97% of Prime members were renewed for a year. In an environment of lower interest rates, customer purchasing power should improve going forward, and that’s great news for this e-commerce powerhouse.
Additionally, Amazon Web Services (AWS) remains the company’s profit engine, and its investments in artificial intelligence (AI) recently helped AWS reach annual revenues of more than $105 billion. And it’s important to remember that Amazon as a whole generates billions of dollars in revenue and profits every year.
All this makes the stock look reasonably priced at 39 times forward earnings estimates.
2. Carnival
Carnival (NYSE: CCL) (NYSE:CUK) struggled in the early days of the pandemic as a temporary halt to cruise operations led to losses – and an increase in debt. But in recent years the company has made huge strides in turning things around and has proven that cruising is still a holiday favorite.
In its most recent quarter, the world’s largest cruise line announced record after record. Third-quarter revenue peaked at $7.9 billion, while operating income hit a record $2.2 billion. Illustrating how much travelers love cruising, the cumulative booked position for 2025 is ahead of the 2024 record – and at higher price levels.
Carnival achieved these results by taking many important steps, such as replacing older ships with new, fuel-efficient ships, reducing new ship orders and designing fuel-efficient routes. The company has also focused on paying down debt, prepaying more than $7 billion since early 2023. All of this contributes to Carnival approaching its goal of investment-grade status by the end of 2026.
Demand for Carnival cruises has already increased, but a lower interest rate environment – on the horizon thanks to a recent rate cut by the Federal Reserve – should support demand. And lower interest rates should also lower the cost of Carnival’s variable-rate loans.
Today, Carnival trades for around fifteen times forward earnings estimates, a fair price for this market giant that is showing it has what it takes to not only recover, but also achieve significant growth.
Don’t miss this second chance at a potentially lucrative opportunity
Have you ever felt like you missed the boat on buying the most successful stocks? Then you would like to hear this.
On rare occasions, our expert team of analysts provides a “Double Down” Stocks recommendation for companies they think are about to pop. If you’re worried that you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
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Amazon: If you had invested $1,000 when we doubled in 2010, you would have $21,266!*
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Apple: If you had invested $1,000 when we doubled in 2008, you would have $43,047!*
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Netflix: If you had invested $1,000 when we doubled in 2004, you would have $389,794!*
We’re currently issuing ‘Double Down’ warnings for three incredible companies, and another opportunity like this may not happen anytime soon.
See 3 “Double Down” Stocks »
*Stock Advisor returns October 14, 2024
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends Carnival Corp. On. The Motley Fool has a disclosure policy.
If I Could Only Buy Two Stocks in the Last Half of 2024, I’d Choose This One Originally published by The Motley Fool
