Right now, many investors are waiting for a stock market crash to buy shares. That’s understandable, as market weakness can provide incredible investment opportunities.
The thing is though, I don’t think investors need to wait for a crash to see attractive opportunities. Looking at the market today, I’m seeing them everywhere.
Near 52-week lows
Take Diageo (LSE: DGE), the owner of Johnnie Walker whisky and Tanqueray gin, for example.
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Back in early 2022, Diageo shares were trading above 4,100p. Today, however, they can be picked up for around 3,350p – almost 20% lower (near 52-week lows).
I think this is an excellent buying opportunity for long-term investors like myself. Diageo is a world-class company (it’s generally considered to be one of the highest-quality companies in the FTSE 100 index).
And with significant exposure to the world’s emerging markets, it has plenty of growth potential going forward.
It’s worth noting that there is some uncertainty here in the short term as the company is facing a legal dispute.
I see this as a short-term blip though. So, I added to my holding last week.
Currently, the stock trades on a forward-looking price-to-earnings (P/E) ratio of around 19, which I think is very reasonable given the company track record (20+ years of consecutive dividend increases) and growth potential.
US rival Brown-Forman, which owns Jack Daniel’s, currently has a P/E ratio of about 29.
Attractive dividend yields
Another high-quality Footsie company that is well off its highs is Unilever (LSE: ULVR), which owns Dove, Hellmann’s, and loads of other popular brands.
Before Covid, this stock was trading above 5,200p. Today though, it’s under 4,000p – nearly 25% lower.
I added to my holding here recently as well.
At today’s share price, I get a dividend yield of around 3.5% on my shares meaning I’m being paid to wait for the share price to recover (there’s no guarantee it will, of course).
And again, the valuation seems very reasonable. Unilever currently has a P/E ratio of about 18 versus approximately 24 for US rival Colgate-Palmolive.
It’s worth pointing out that higher costs are weighing on Unilever’s profits at the moment. I don’t expect this to last forever though.
A rare buying opportunity
It’s not just UK shares that are well off their highs, however.
Take a look at Amazon (NASDAQ: AMZN) which is listed in the US.
It was trading near $185 ($3,700 before the recent 20:1 stock split) during Covid. Today however, it can be snapped up for around $125 – more than 30% below its highs.
Given the huge pullback, I’ve been adding to my position here lately.
I think this company is just getting started. In the years ahead, I expect to see further growth in its online shopping and cloud computing revenues. And I’m excited about what the company is doing in the artificial intelligence (AI) space.
This is a volatile stock, however. So, while I expect the stock to rise in the long term, I’m not expecting it to climb in a straight line.
I’m buying now
These are just three examples of stocks that are well off their highs, and look interesting to me. There are many more.
Looking for more investment ideas? One can find plenty here at The Motley Fool.
