3 Companies to Buy When the Market Bottoms Out

Read my prediction on when the market will hit bottom, and my three top investment picks to snap up: H&R REIT (TSX:HR.UN), Bank of Montreal (TSX:BMO)(NYSE:BMO), and Enbridge (TSX:ENB)(NYSE:ENB).

My best guess, at this time, as to when the market may hit bottom would be around the end of this year or beginning of next year. I came to this prediction while looking at data that is currently available. In addition, I included the various projections of timelines with respect to the coronavirus. I specifically considered when we can realistically have a vaccine ready for global innoculations.

With that in mind, here are three companies that are on my buy list. This may entice readers who are also building their shopping lists and looking to load up when the market hits bottom.

H&R REIT

In the real estate investment trust (REIT) space, most investors will perform best over long periods of time by picking the largest and best-diversified companies. (This also applies to most sectors, for that matter). H&R REIT (TSX: HR.UN) certainly fits this bill, with a range of diversified real estate holdings. These include industrial holdings, U.S. apartments, malls, and office buildings. The industrial holdings are a key selling point for me, as many readers know.

The trust holds a number of trophy properties and generally has high-quality tenants supporting its cash flow. This makes H&R REIT one of the few I would hand-pick to survive an economic catastrophe, such as the one we are on the precipice of now.

Bank of Montreal

The Canadian banking system continues to be widely touted by Canada’s federal government as one of the most stable systems in the world. Some investors, including me, believe that Bank of Montreal (TSX: BMO)(NYSE: BMO) and the other Big Five banks will make it out of the upcoming recession.

Therefore, waiting on shares of BMO to settle down before initiating a position (or adding to your existing holdings) could turn out to be a great idea over the long term. Canada’s big banks will undoubtedly be backstopped by the federal government.

While loan losses could indeed turn sour in the near term, BMO and its peers have proven time and again they are solid long-term buy-and-hold investments. These are good picks to put in a retirement fund and forget about for a couple of decades.

Enbridge

As far as energy companies go, Enbridge (TSX: ENB)(NYSE: ENB) is one of the few companies I would encourage investors to consider as a long-term holding.

This is due to the unfortunate reality that the current rock-bottom commodity prices we’ve seen of late will very likely lead to bankruptcies in the near term. Over the next few quarters, it looks like producers will run out of cash and their credit lines will dry up.

Enbridge has obvious counterparty risk, which is now being heavily priced into their stock price. However, Enbridge is a vertically integrated energy infrastructure company with better cash flow than the vast majority of its peers. This makes Enbridge one of my top long-term picks.

Stay Foolish, my friends.

Fool contributor Chris MacDonald does not have ownership in any stocks mentioned in this article.

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