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12 Top Stocks For A Bear Market - Automatic Data Processing Is Our Favorite

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Psycho Analyst


  • Though the prices of many high quality stocks have fallen by double-digit amounts YTD, a thorough scan of the S&P 500 finds that these stocks are still overvalued.
  • I scanned the whole S&P 500 for non-cyclical stocks with excellent credit histories, strong growth histories and growth forecasts, and came up with 12 candidates for Bear Market buys.
  • I calculated a "Bear Market Price" based on their current earnings and the P/E ratio these stocks reached in December 2018's brief Bear Market.
  • ADP is most likely to reach a price near its Bear Market Price if the market continues to decline. V and ANTM too, but are less attractive. The rest of the 12 would only be well priced in a severe bear market.
  • PayPal has a much shorter history than the other stocks but is the only one that currently offers a Bear Market Price along with the possibility of strong future earnings growth.
Bear Market

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After two months of intense market volatility, a correction in the S&P 500 and much mumbling in the financial media about how more than half of the stocks in the S&P 500 are already in a bear market, I thought it was

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Psycho Analyst profile picture
Though I have done quite a few different things over the course of a long life, I am best known as a writer of bestselling books about business and health. My success has come because I am a very curious person who doesn't just follow the herd and trust whatever the experts tell us to believe. I do my own research. I collect the facts, look at them objectively, and draw my own conclusions. Over the years, I have been amazed at how much of what everybody "knows to be true" is based on poorly designed studies, many of them impossible to replicate. I approach Investing with the same open mind, challenging the orthodoxies that attract the herd, studying how things really work, and doing my best to come up with an approach, based on facts, that works for me and would appeal to those who find thinking worthwhile. Lately I have been investigating how the indexes that underlie ETFs are constructed and finding out in the process that the way these indexes are set up guarantees that many of the ETFs people buy are not really doing what their titles suggest they do. I am also doing my best, in the current very challenging environment, to find relatively safe ways to deploy the money I use to generate income, money that I would normally put into CDs. I use valuation concepts and a liberal sprinkling of common sense to find stocks that I believe will not only produce modest amounts of income, but also grow their share price over the next five years.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of CVS, HSY, LOW, PYPL, VTI, VOO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am not a registered investment advisor. I am an ordinary investor who does research to clarify my own understanding of stocks, ETFs, and the market in general. Before you invest based on anything you might read in my articles or those of any other person offering investment advice online, do your own research to confirm the soundness of what you might have read.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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