Over the last month, Wall Street has offered a stern reminder to investors that stocks don’t move higher in a straight line. In particular, the growth-fueled Nasdaq Composite shed approximately 1,400 points, or 8% of its value, during the first three trading sessions of August.
Although stock market corrections can be unpredictable and, at times, unnerving, they’ve also historically represented the ideal time for opportunistic long-term investors to pounce on high-quality companies at a discounted price. Eventually, every correction, bear market, and crash has been placed firmly into the back seat by a bull market rally.
Making matters even more favorable for patient investors is the fact that most online brokers have done away with barriers that had previously kept retail investors from growing their wealth on Wall Street. With minimum deposit requirements and commission fees for common stock trades mostly a thing of the past, any amount of money — even $300 — can be the perfect amount to put to work in the stock market.
If you have $300 that’s ready to invest, and you’re certain this isn’t cash that’ll be needed to pay bills or cover an emergency, should one arise, the following three stocks stand out as no-brainer buys right now.
Walt Disney
The first unstoppable business that investors can confidently add to their portfolios right now with $300 is none other than media goliath Walt Disney (DIS).
Disney has seemingly had headwinds coming at it from all directions over the last four years. It’s contended with the COVID-19 pandemic hurting its studio and theme park operations, and has been forced to spend big bucks on its direct-to-consumer (DTC) streaming services as cable cord-cutting picks up. To say that this has been a challenging start to the decade for the company would be an understatement.
However, Walt Disney’s competitive advantage and discernible signs of operating improvement suggest the future looks bright for the so-called “House of Mouse.”
Disney’s biggest competitive edge is its irreplaceability within the entertainment space. Despite there being no shortage of theme parks, cruise lines, streaming services, and movie studios, none possess the depth of stories, characters, and emotional engagement that Disney has evoked over the last century. Investors will gladly pay a premium for a company whose branding ensures its continued success.
Another reason for prospective investors to be excited about Disney’s long-term prospects is its meaningfully improved streaming segment results. Modest subscriber growth, coupled with increasing its monthly subscription cost for DTC services, helped Disney’s streaming segment swing to a quarterly operating profit from the prior-year period. Management had previously been targeting recurring profits for its DTC segment by the fiscal fourth quarter, which ends in late September.
The final puzzle piece for Walt Disney is its attractive valuation. Even with some noted softening in consumer spending for the company’s Experiences segment, Disney’s streaming, ESPN, and studio operations have all performed better than expected. At its current forward price-to-earnings (P/E) ratio of 16.8, Disney’s stock is valued at a 37% discount to its average forward P/E over the last five years.
Okta
A second magnificent stock that makes for a no-brainer buy right now if you have $300 ready to invest is cybersecurity solutions provider Okta (OKTA).
Although all eyes are on CrowdStrike Holdings following its Falcon update snafu that knocked various airlines and financial service providers offline, Okta unceremoniously found itself in the spotlight last October when hackers breached its platform and accessed information from its clients. While breaches are never a good thing, the negative PR and revenue hit associated with these events is, historically, short-lived.
The good news for cybersecurity companies is that their products and services have evolved into basic necessities. With businesses shifting their data online and into the cloud at an accelerated pace since the pandemic began, it’s become more important than ever for companies to protect their data and that of their clients in any economic climate. For subscription-driven companies like Okta, this typically leads to predictable operating cash flow quarter after quarter.
What makes Okta tick is the company’s cloud-native, artificial intelligence (AI)- and machine learning-driven identity-verification platform. While the October data breach demonstrates that additional refining is needed, AI platforms capable of growing smarter and more effective over time should easily outperform on-premises solutions.
One of the more impressive metrics for Okta has been its ability to upsell and attract bigger fish. When fiscal 2022 came to a close (Okta’s fiscal year ends on Jan. 31), 20.7% of the company’s roughly 15,000 clients had an annual contract value (ACV) in excess of $100,000. As of the first quarter of fiscal 2025, almost 24% of its 19,100 customers had an ACV of at least $100,000. Landing larger clients and upselling existing customers has ballooned its backlog by 14% from the prior-year period to $3.36 billion.
While Okta’s forward P/E of 33 is, on paper, aggressive, the expectation is it’ll grow its earnings per share (EPS) by an average of 25% per year through 2028. This makes Okta a plain-as-day bargain.
Alphabet
The third no-brainer stock that’s begging to be bought with $300 right now is “Magnificent Seven” component Alphabet (GOOGL) (GOOG). This is the parent of internet search engine Google, streaming service YouTube, and cloud infrastructure-service platform Google Cloud, among other ventures.
The primary headwind current and prospective investors have to consider with Alphabet is the health of the U.S. and global economy. Roughly 76% of the company’s $84.7 billion in Q2 sales can be traced back to advertising. Businesses aren’t shy about reining in their marketing budgets when signs of trouble first appear. If the U.S. economy were to dip into a recession, it would be expected to adversely impact Alphabet’s ad revenue.
On the other hand, patience is precisely what’s made Alphabet such a phenomenal business. Out of the 12 U.S. recessions that have occurred since the end of World War II, nine were resolved in less than 12 months. Comparatively, most periods of growth have endured multiple years, with two expansions reaching the 10-year mark. The ad climate is conducive to growth more often than not.
Alphabet’s foundational-operating segment continues to be its internet search engine. In July, Google accounted for 91% of global internet-search share, based on data from GlobalStats. Having a practical monopoly on internet search for more than a decade affords Google exceptional ad-pricing power.
However, Alphabet’s future is very much reliant on the growth of Google Cloud. Enterprise spending on cloud services is still in its very early stages of expansion. Google Cloud has already carved out a 10% share of worldwide cloud infrastructure-services spend (as of the end of 2023), and the margins associated with cloud services are notably beefier than those tied to advertising. As Google Cloud grows into a larger percentage of Alphabet’s total sales, its operating cash flows should benefit in a big way.
To keep with the theme, Alphabet’s stock is also historically cheap. Shares can be scooped up by opportunistic investors right now for less than 19 times forward-year earnings, which represents a 21% discount to its trailing-five-year forward-earnings multiple.
— Sean Williams
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Source: The Motley Fool