3 no-brainer stocks to buy for $300 right now

Over the past month, Wall Street has delivered a stark reminder to investors that stocks don’t rise in a straight line. In particular, fueled growth Nasdaq Composite lost about 1,400 points, or 8% of its value, in the first three trading sessions in August.

While stock market corrections can be unpredictable and sometimes unsettling, they have also historically been the ideal time for opportunistic long-term investors to pounce on high-quality companies at a discount. Eventually, every correction, bear market, and crash was put firmly on the backseat by a bull market rally.

Making things even more favorable for patient investors is the fact that most online brokers have removed the barriers that previously prevented retail investors from growing their fortunes on Wall Street. With minimum deposit requirements and commissions for common stock trades largely 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 sure it’s not cash that will be needed to pay bills or cover an emergency should one arise, the following three stocks stand out as no-brainer purchases now.

Walt Disney

The first unstoppable business that investors can confidently add to their portfolios right now with $300 is none other than the media goliath Walt Disney (NYSE: DIS).

It seems that Disney has had headwinds from every direction for the past four years. It is battling the COVID-19 pandemic that has affected its studio and theme park operations and has been forced to spend big on its direct-to-consumer (DTC) streaming services as cable cord-cutting begins. To say this has been a challenging start to the decade for the company would be an understatement.

However, Walt Disney’s competitive advantage and visible signs of operational improvement suggest that the future looks bright for the so-called “House of Mouse.”

Disney’s biggest competitive advantage is irreplaceable in the entertainment space. Despite the fact that there is 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 conjured over the last century. Investors will happily pay a premium for a company whose branding ensures its continued success.

Another reason potential investors are excited about Disney’s long-term prospects is the significantly improved results of the streaming segment. Modest subscriber growth, along with an increase in the monthly subscription cost for DTC services, helped Disney’s streaming segment reach a quarterly operating profit from the year-ago period. Management had earlier targeted recurring profits for its DTC segment through the fiscal fourth quarter, which ends at the end of September.

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The final piece of the puzzle for Walt Disney is its attractive valuation. Even with a noted decline in consumer spending for the company’s Experiences segment, Disney’s streaming, ESPN and studio operations all performed better than expected. At its current price-to-earnings (P/E) ratio of 16.8, Disney stock is valued at a 37% discount to its average forward P/E over the past five years.

Okta

A second magnificent stock that makes for a no-brainer buy right now if you have $300 ready to invest is the cybersecurity solutions provider Okta (NASDAQ: OKTA).

Although all eyes are on you CrowdStrike Holdings Following the Falcon update, which knocked various airlines and financial services providers offline, Okta unceremoniously found itself in the spotlight last October when hackers breached its platform and accessed information from its customers. While breaches are never a good thing, the negative PR and revenue impact associated with these events is historically short-lived.

The good news for cybersecurity companies is that their products and services have evolved into basic needs. With businesses moving their data online and into the cloud at an accelerated pace since the start of the pandemic, it has become more important than ever for businesses to protect their data and that of their customers in any economic climate. For subscription-based companies like Okta, this typically results in predictable operating cash flow quarter after quarter.

What makes Okta work is the company’s artificial intelligence (AI) and machine learning-based identity verification platform. While the October data breach demonstrates that further refinement is needed, AI platforms capable of becoming smarter and more efficient over time should easily outperform on-premise solutions.

One of the most impressive metrics for Okta has been its ability to sell and attract bigger fish. When fiscal 2022 ended (Okta’s fiscal year ends Jan. 31), 20.7 percent of the company’s roughly 15,000 customers had an annual contract value (ACV) of more than $100,000. As of the first quarter of fiscal 2025, nearly 24 percent of its 19,100 customers had an ACV of at least $100,000. Acquiring larger customers and upselling existing customers increased its backlog by 14% year-over-year to $3.36 billion.

While Okta’s P/E of 33 is aggressive on paper, it is expected to grow its earnings per share (EPS) by an average of 25% per year until 2028. This makes Okta a simple business.

Alphabet

The third no-brainer stock begging to be bought at $300 right now is the ‘Magnificent Seven’ component Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG). It is the parent of the Google Internet search engine, the YouTube streaming service, and the Google Cloud infrastructure services platform, among other ventures.

The main upside for current and potential investors to consider with Alphabet is the health of the US and global economy. About 76 percent of the company’s $84.7 billion in Q2 sales can be traced to advertising. Businesses aren’t shy about cutting their marketing budgets when signs of trouble first appear. If the US economy were to enter a recession, it would be expected to have a negative impact on Alphabet’s advertising revenue.

On the other hand, patience is precisely what has made Alphabet such a phenomenal business. Of the 12 US recessions that have occurred since the end of World War II, nine have been resolved in less than 12 months. Comparatively, most growth periods lasted several years, with two expansions reaching the 10-year mark. The advertising climate is favorable for growth most of the time.

Alphabet’s core operating segment continues to be its Internet search engine. In July, Google accounted for 91% of the global internet search share, based on data from GlobalStats. Holding a virtual monopoly over internet search for more than a decade gives Google exceptional ad pricing power.

However, Alphabet’s future depends heavily on the growth of Google Cloud. Enterprise spending on cloud services is still in its early stages of expansion. Google Cloud has already achieved a 10% share of global cloud infrastructure spending (as of the end of 2023), and the margins associated with cloud services are considerably higher than those associated with advertising. As Google Cloud grows into a larger percentage of Alphabet’s total sales, its operating cash flows should benefit significantly.

To keep with the theme, Alphabet stock is also historically cheap. The stock can be snapped up by opportunistic investors right now for less than 19 times annualized earnings, a 21% discount to its long-term five-year earnings multiple.

Should you invest $1,000 in Walt Disney right now?

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Suzanne Frey, chief executive at Alphabet, is a member of the Motley Fool’s board of directors. Sean Williams has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, CrowdStrike, Okta, and Walt Disney. The Motley Fool has a disclosure policy.

3 No-brainer Stocks to Buy for $300 Right Now was originally published by The Motley Fool