Blue-chip stocks are always the best choice if you’re looking for big gains without loading up on speculative stocks. The oversold blue-chip stocks to buy provide more consistent upside for investors, with strong long-term growth opportunities.
Most blue-chip stocks have proved themselves in terms of returns and long-term growth trajectories. After years of investing, the allure of high-growth stocks fades. Embracing stable or “boring” stocks becomes a wiser decision for investors nearing retirement, as capital preservation becomes a much more important goal.
For those with such a view, let’s dive into these three oversold blue-chip stocks to buy before the market rally potentially kicks into gear in June.
Alphabet (GOOG, GOOGL)
Like its Magnificent Seven peer, Nvidia (NASDAQ:NVDA), many thought Alphabet (NASDAQ:GOOG,GOOGL) would take much longer to approach the $3 trillion value club. Currently, the company has a market capitalization of $2.2 trillion and continues to see strong upside momentum. If Alphabet’s growth continues accelerating, a 36% move would bring this company into that club. It’s certainly within the realm of possibility at this point.
With a strong global brand, Alphabet is an unstoppable blue-chip stock, with its YouTube and Google search engine segments driving consistent cash flow growth. Over the past year, the company generated $8.1 billion and $9.6 billion in revenue from YouTube and Google. Moreover, the company consistently increases its free cash flow through diverse revenue streams. This diversification program continues, providing growth investors with new reasons to hold onto this stock for the long-term.
Among the key investment areas are AI technologies, specifically those that can be integrated into search. The company is redirecting resources to other projects with more immediate upside. Like the moves we’re seeing with other blue-chip tech stocks, investors have reason to believe this strategic refocus will pay off, given Alphabet’s long-term track record.
PepsiCo (PEP)
For over 50 years, PepsiCo (NASDAQ:PEP) has been in the beverage sector. It has grown into a global dividend aristocrat. The stock is currently trading around $163 per. A dip in stock price and the company’s 52nd-straight dividend increase this past quarter have bolstered this strong yield.
From an income perspective, there’s a lot to like about Pepsi’s position. The company’s strong cash flow generation profile, driven by entrenched brands in defensive market areas, is very bullish for those taking a long-term view of the company and its sector.
Despite recent pullbacks, Wall Street remains bullish on the company, and I don’t blame them. Analysts at Morgan Stanley have reiterated a buy rating and a $190 price target, implying more than 16% upside from here. In addition to the company’s yield, investors could reap a 20% return over the next year if analysts are right about this company.
Coinbase (COIN)
As a major centralized cryptocurrency platform, Coinbase (NASDAQ:COIN) is now gaining prominence amid the growing adoption of digital currency. Cathie Wood, a big fan of the company, has put her money where her mouth is, buying millions of shares of COIN stock over the years. Coinbase is no longer the largest position in her portfolios. However, her dedication to the company and its long-term growth prospects is notable.
Coinbase’s recent surge this past year can be tied to a market recovery driven by key catalysts. We had the April Bitcoin (BTC-USD) halving event, approval of spot Bitcoin and Ethereum (ETH-USD) ETFs and strong capital inflow data into the crypto sector. Retail investors have also begun to trade as they once did. This drives the company’s trading fee revenue to new highs amid the onset of what many believe are a historic crypto bull market underway.
Coinbase, a crypto exchange, increased its lobbying efforts before the November U.S. elections by donating $25 million to Fairshake, a crypto-focused super PAC. CEO Brian Armstrong noted that the PAC and its affiliates raised $160 million this cycle. Armstrong emphasized supporting pro-crypto candidates to ensure crypto’s political significance.
Analysts view Coinbase as a top way to play key long-term growth sectors. This option is great for those seeking higher returns with reasonable risk.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.