Has the bear market finally given way to a new bull market? Perhaps. Although shares have only been choppy of late, we’ve seen a few glimpses of the bullish glow since October. It is certainly arguable that we are nowhere near the end of the bear market.
With that as background, here’s a closer look at three stocks you’ll want to buy at the start of a new bull market: joint rent (URI -0.30%), NVIDIA (NVDA -4.80%), and upside down beauty (upside down -1.21%). These tickers were among the biggest winners of the last bull market. And the products and services of their respective company are always in demand during the phases of economic development.
These stocks gained quadruple digits between 2009 low and 2021 high. While it may be difficult to recapture similar-sized gains during the next bull market, there’s no doubt that all three companies have the things right once the global economy begins to flourish again.
Let’s look at United Rentals first. Many years ago there was a time when companies debated buying equipment versus renting it as needed. The cost of purchasing the equipment has since surpassed inflation.
Still, there is availability of rentals. Both trends favor tool rental organizations like United Rentals, which provides short-term access to everything from tile saws to scissor lifts to backhoes, and more. Assuming that a new bull market coincides with stabilizing economic growth and interest rates, which in turn spark a new housing boom, this company could be bullish in the years to come.
Still, it wouldn’t be an entirely crazy idea to let shares of United Rentals slide a little below their recent record highs if you’re interested. It looks like most investors are seeing the same dynamic, buying up pre-emptive stocks for what looks like a very bright future.
Technology is also always in demand, but certain types of technology see especially high demand when times are good and corporate profits are strong. Nvidia makes a great deal of this technology. In fact, its graphic cards account for more than 80% of the world’s graphic processor sales, according to John Peddie Research. Video gamers love them, and so do a growing number of computer animation and design professionals.
Nvidia’s big breadwinner during the next bull market, however, will not be the graphics processing unit, which is meant to generate a visual display for users. The company’s next big growth engine is artificial intelligence. As it turns out, the same technology that makes great graphics cards also makes great machine-learning tools. That’s why Nvidia’s hardware is already found in most of the world’s most powerful supercomputers, including the most powerful one owned and operated by the Facebook parent. meta platform,
In light of this reach, Presidency Research expects the AI hardware market to see compounded annual growth of nearly 30% through 2030, which is great for Nvidia. A bull market will only increase the stock’s potential.
upside down beauty
Finally, add Ulta Beauty to your list of potential mega-winners for the next bull market. It rallied over 7,000% from its early 2009 low to its 2021 high, and then somehow defied last year’s bear run, now trading up nearly 10,000% from its low made just 14 years ago.
Another such benefit is unlikely. But another market-beating advance is hardly out of the question. This is because the chain of over 1,300 cosmetics, fragrance and skincare stores is striking the right chord with consumers, offering a combination of affordability, accessibility and connectivity. Although the company offers online shopping, the stores themselves are where most of the personal relationships with customers are established and then maintained with an assortment of over 25,000 different products.
Other retailers may look similar. The upside, however, is different in the ways that matter most. Its value proposition means it can stand up to weak economies. When times are good, though, it can really shine by catering to the whims of consumers.
just keep things in perspective
Again, just because these three stocks performed extremely well during the last bull market doesn’t mean they’ll repeat the feat in the next one; They probably won’t. Most major winners are unexpected, often “coming out of nowhere,” so to speak. The next bull market is not apt to break away.
Also know that although it’s never too early to start reorganizing your portfolio to go long bullish, there’s no guarantee that last year’s bear market is over. It is possible that we may see new lows before all is said and done.
On the other hand, the biggest risk that investors face is not a little more downside, but missing the full potential of a new bull market right from its inception. A large portion of the profits of a long-term bull run take shape at the beginning of a bull market.
Either way, all three of these stocks are meant to be long-term positions based on their past results and their underlying company’s future growth prospects. It doesn’t – or shouldn’t, anyway – matter a whole lot if you step into the exact bear market. The only exception to this sentiment may be United Rentals, simply because it has bucked the market-wide slump and risen since October.
Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool has posts at Meta Platforms, Nvidia and Ulta Beauty and recommends it. The Motley Fool has a disclosure policy.