There are two ways for investors to approach market volatility depending on their personality and experience level – either reduce risk and play defense or use market dips as an opportunity to scoop up shares of the best stocks at lower prices. It seems like nearly every month this year the market takes a downturn right around options expiration week, which has thus far provided fantastic opportunities to buy the dip in the top companies. The same might hold true this month as investors deal with market volatility prior to the August monthly options expiration on Friday.
While it might be intimidating to put money to work when the market looks weak, it’s can definitely be worth taking a shot at some buys and slowly scaling into new positions as the market provides more signals that a bounce is on the horizon. Investors should focus on several market-leading stocks if we continue to experience volatility in the coming trading sessions, as they might not get another opportunity to add shares at lower price levels.
That’s why we’ve put together the following list of 3 market-leading buy the dip stocks to focus on going forward. Here are some more details on these top names.
1. Fortinet
This incredibly strong cybersecurity stock has been trending up throughout 2021 and hasn’t provided too many dips to take advantage of, which is why it’s a name that should be on investors' radar during bouts of volatility in the market. Fortinet (NASDAQ:FTNT) is a global leader in broad, automated, and integrated cybersecurity solutions that are increasingly important as cyber threats continue to make headlines on a frequent basis. What’s attractive about Fortinet is that the company’s products serve tons of different customers, including enterprises, service providers, government organizations, and small and medium-sized businesses.
Investors should anticipate spending on cybersecurity to continue for many years to come, and this company’s flagship FortiGate hardware appliances are likely going to see heavy demand given that they offer customers the ability to manage security capabilities across their cloud and software-defined wireless networks. The company is a market leader in cybersecurity and ranks #1 in the most security appliances shipped worldwide, which is certainly an attractive statistic to consider. Finally, the company’s Q2 earnings results were quite impressive, as the company delivered total revenue of $801.1 million, up 30% year-over-year, and a quarterly record free cash flow of $394.7 million.
2. NVIDIA
While some investors might think that NVIDIA (NASDAQ:NVDA) stock hasn’t been acting right since its split took place, the truth is that it has likely just been digesting the massive move that occurred earlier this year. It’s a great buy-the-dip candidate to consider, especially after the leading semiconductor company’s recent stellar earnings results. With exposure to some of the most exciting industries globally, including gaming, data center, professional visualization, and automotive, it’s hard to argue against owning at least some shares of NVIDIA for the long term.
Investors should be very optimistic about the company’s immense growth with both its data center and gaming products, with both segments delivering record revenue for the most recent quarter. Q2 GAAP earnings per share for NVIDIA were up 276% year-over-year at $0.94 on record revenue of $6.51 billion, up 68% year-over-year, which are the type of numbers that should give investors plenty of confidence to add shares on dips. This is clearly a tech company operating at a high level even amidst the global chip shortage, and it could be a great idea to consider adding shares during periods of market weakness.
3. Nucor
It pays to seek out the strongest companies in their respective sectors whenever you are trying to buy the dip. That’s the case with Nucor, which is arguably the best steel stock in the metals & mining sector to consider owning for the long term. Nucor (NYSE:NUE) is a major manufacturer of steel and steel products and will undoubtedly play a huge part in helping to repair the country’s infrastructure, which is reason enough to consider adding shares. There’s also a lot to like about Nucor’s business as it will benefit from a rebound in construction activity following the pandemic.
The company has delivered two consecutive quarters of record earnings and is clearly benefitting from elevated steel prices at this time. Nucor also recently announced that it has completed a $1 billion acquisition of Cornerstone Building Brands’ insulated metal panels business, which broadens the company’s product base and should be a major positive over the long term, given that the demand for these types of products is expected to grow at double-digit annual rates over the next decade.