While the threat of recession is still looming over the US stock market, the early March correction showcased which stocks are most likely to rebound. In addition to daily market dynamics, these stocks represent sound investments at their current price levels when zoomed out for the long haul.
This makes them preferable picks for both watchlists and present buy zone levels.
1. GE Aerospace: Dual-Sector Engine Giant with High-Margin Recurring Revenue
GE Aerospace (NYSE:GE) is one of the world’s top aircraft engine and avionics suppliers. Not only does the company develop and manufacture engines for commercial jetliner manufacturers, such as Boeing (NYSE:BA) and Airbus, but also for military contracts.
Just this month, GE secured a $5 billion contract for F110-GE-129 engines found in F-15 and F-16 combat aircraft. Although these are older military assets, GE has a steady demand owing to international exports which typically exclude the US’ cutting edge tech like F-22 or the latest F-47 granted to Boeing.
Likewise on the commercial front in the same month, GE Aerospace and Boeing secured a $32 billion deal for Korean Air, for up to 50 new planes with GE engines. In addition to new sales, GE generates recurring high-margin revenue from maintenance, repair, and overhaul (MRO) services in both sectors.
This fertile business model is reflected in GE stock, having gone up 460% over the last five years. Presently priced at $211.98, GE shares are up 25% year-to-date. Although the price correction in early March would’ve been more optimal, GE still offers a safe bet for long-term value investors. If not now, investors should look at GE at the first stock market correction.
Having partnered with German eVTOL company Lilium (LILM), GE’s foothold in this emerging market is also yet to be fully priced in. According to WSJ’s forecasting data, the average GE price target is $230. The low estimate for GE stock is $202 while the price ceiling target is $261 per share.
2. Spotify: Freemium Model Drives Strong User and Revenue Growth
After a dip in early March, Spotify Technology SA (NYSE:SPOT) stock rallied, having gained 3.4% over a month. Year-to-date, SPOT shares gained 34% value as the company exceeded analyst expectations of adding 7.9 million subscribers in Q4 2024. Instead, Spotify gained 11 million premium subscribers for its vast audio library.
In other words, Spotify’s freemium model of providing base service, to then convert them, is continuing to work exceptionally well. As of the last earnings report in February, the platform services 675 million monthly active users (MAUs), of which 263 million are premium subscribers.
This represents an annual subscriber growth of 11%, while Spotify’s free cash flow increased by 121% to €877 million in the same period. Likewise, Spotify’s gross margin of 32.2% exceeded previous guidance.
Against the present price of $616.69, the average price target is expected at $637.10 according to WSJ forecasting. The low estimate is $440 while the ceiling price is $703.25 per share. Just like with GE stock, SPOT represents a current buy-in opportunity, but also one at the first available dip due to its long term fundamentals.
3. MicroStrategy: Bitcoin Proxy Stock With Strategic Accumulation
With Bitcoin still under $90k, it is worth considering its primary stock proxy, Michael Saylor’s MicroStrategy Incorporated (NASDAQ:MSTR), renamed to Strategy in early February. As previously explained in greater detail, the company leverages debt to buy scarce bitcoins with eroding dollars.
On Monday, Strategy disclosed another BTC purchase batch worth $584.1 million, raising the accumulated Bitcoin holdings to 506,137 BTC. This makes the company the largest single corporate Bitcoin holder, constituting 2.55% of the available circulating supply of 19.8 million.
For comparison, the most successful Bitcoin ETF, BlackRock’s iShares Bitcoin Trust (IBIT), holds a balance of 574,083 BTC. Against Bitcoin’s year-to-date performance of negative 9%, MSTR stock has a positive gain of 12.33%, once again demonstrating Saylor’s leverage of investor psychology and market dynamics.
And with post-Trump election hype deflated, Bitcoin has the fewest structural vulnerabilities in its history. Although the establishment of the Bitcoin Strategic Reserve was less bullish than expected, as no taxpayer money will be used to buy new BTC, it still removed the selloff factor of seized BTC from the table.
Most financial institutions and analysts forecast BTC price at around $200,000 by the end of 2025, as the lag from canceled Operation Choke Point 2.0 is felt moving forward. This makes the current MSTR price of $335.89 a solid entry point, given that the stock keeps outperforming BTC itself.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
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