If you’ve got $1,000 just waiting to be put in financial markets, now would be a great time while valuations are still skewed on the lower end. Indeed, some may argue that stocks aren’t even a great deal here, given the economic weakness to come. Earnings tend to take a step back when economic recessions roll around. Despite this, things tend to normalize in a year or two after the recession has struck. Indeed, big earnings busts tend to follow big earnings booms. So, for long-term investors, a recession is really not a big deal. And it’s certainly not wise to act on raw emotion.
There were simply too many speculators and traders chasing stocks in 2021. The swamp has been drained, so to speak. With collateral damage making its way into well-run companies, I think it’s time to give many blue chips a second look before this market starts looking past the rate hikes and looming period of economic contraction.
After a contraction comes an expansion. Markets will always cycle in between and it’s the biggest gains that tend to be had in the early stages of a new bull market. When a new bull is born, the rewards tend to be huge, while risks tend to be lower than historical norms.
In this piece, we’ll consider two TSX stocks I’d be willing to buy now and hold all the way until retirement. Enter Jamieson Wellness (TSX: JWEL) and Aritzia (TSX: ATZ).
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Jamieson Wellness: Recession resilience in a nutshell
Jamieson Wellness is a vitamins, minerals, and supplements (VMS) firm that’s held its own rather well during the pandemic. Indeed, health consciousness isn’t just a trend for Baby Boomers and young Millennials, it’s been given a major jolt amid the public health nightmare. Just because COVID is abating, though, doesn’t mean demand for Jamieson’s top-grade products are about to fade. The firm’s ambitious international push is intriguing and could yield plentiful dividends for years to come.
Further, vitamins tend to be recession resilient. As I’ve stated previously, Jamieson is a seal of quality. The brand is trusted and will always be preferred over cheaper supplements that may not be up to par on the quality front. At the end of the day, saving a few quarters is not worth risking one’s health.
That’s why I think JWEL is a steal at 20% below its highs of nearly $42 per share. The stock yields more than 2%. With a growthy dividend and attractive recession-resilient growth story, I’d argue the stock is a must-buy at just north of 25 times trailing price-to-earnings (P/E).
Jamieson isn’t as exciting as high fashion, but its fundamentals are incredibly attractive, as the firm embarks on its expansion.
Aritzia: Strong growth at reasonable multiples
Aritzia is another growth stud that’s unlikely to sink as a result of the coming recession. Upscale clothing is not recession-proof by any stretch. However, I am a fan of the magnitude of brand strength as the firm moves deeper into the U.S. market. Fashion tends to pave the way for volatility. However, when you’ve got a world of growth opportunities and a strong management team that knows how to bring out the best in the in-store and online experience, it’s pretty tough to stop such an up-and-comer.
At just shy of 32 times P/E, Aritzia may not be priced with a recession in mind. As shares dip into 2023, I’d look to average into a full position. ATZ is the epitome of growth at a reasonable price!
