Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Since bottoming out in late March, the stock market has rebounded nicely, with the S&P 500 up by more than 25% from the recent low. I often describe Synchrony Financial as the biggest credit card company you've never heard of. Market data powered by FactSet and Web Financial Group. Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) has one of the most closely followed stock portfolios in the world, and for good reason. The questions that remain unanswered are just how long the coronavirus pandemic will effectively shut down the American economy and how quickly consumer demand for new cars, travel, and shopping will rebound when these businesses are able to safely reopen. msn back to msn home money. Simon owns and operates a massive portfolio of malls, including high-end properties under the Mills brand name and the largest chain of outlet malls under the Premium Outlets brand. However, Simon should make it through the pandemic just fine. Let's conquer your financial goals together...faster. Returns as of 10/18/2020. Not only does social distancing make it rather impractical to spend time with a salesperson at a dealership, but recession fears and COVID-19 uncertainty have given investors reason to pump the brakes when it comes to making large purchases. Matt is a Certified Financial Planner based in South Carolina who has been writing for The Motley Fool since 2012. While many of STORE's roughly 2,500 properties are occupied by tenants that are "essential businesses" and therefore still in operation, a significant portion is not. Here's just how cheap each has become and which (if any) could be a good stock for long-term investors to buy now. I'm of the opinion that there will be a ton of built-up demand once we get the all-clear. I won't sugarcoat it. As a final thought, remember that Warren Buffett is a long-term investor, and you should approach these two stocks with that type of mentality -- especially now. Matt specializes in writing about bank stocks, REITs, and personal finance, but he loves any investment at the right price. However, the company is taking prudent steps to weather the storm. 2 Warren Buffett Stocks at Fire-Sale Prices | The Motley Fool Latest Stock Picks Returns as of 10/18/2020. If the economy rebounds relatively quickly, GM should be in fantastic shape going forward. Plus, GM's North American factories are closed down, so it isn't producing anything new -- in fact, GM plans to use its factories to help manufacture ventilators to help with the COVID-19 efforts. Cumulative Growth of a $10,000 Investment in Stock Advisor, 2 Warren Buffett Stocks at Fire-Sale Prices @themotleyfool #stocks $BRK-A $BRK-B $SYF $STOR, Wow! The company issues store credit cards on behalf of some of the biggest retail names in the U.S., such as Amazon.com, Gap, T.J. Maxx, and Lowe's, just to name a few. All three have excellent management teams, and all three have sufficient financial resources to absorb the expected impact of the COVID-19 pandemic. Stock Advisor launched in February of 2002. Three stocks trading at fire-sale valuations after the recent market downturn are giant automaker General Motors (NYSE:GM), casino operator MGM Resorts (NYSE:MGM), and mall REIT Simon Property Group (NYSE:SPG). To name the biggest trouble spots, restaurants, health clubs, movie theaters, and family entertainment centers combine to make up 28% of the company's rental income. Not only does social distancing make it rather impractical to spend time with a salesperson at a dealership, but recession fears and COVID-19 uncertainty have given investors reason to pump the brakes when it comes to making large purchases. The big question is how long the pandemic -- and the recession it's causing -- will last. On a positive note, times like these can be excellent opportunities to find long-term winners that have been beaten down. They are scheduled to reopen on March 29, but there's a high probability that the closures will last for at least a few weeks beyond that date. Stock Advisor launched in February of 2002. Copyright, Trademark and Patent Information. Now, as it applies to the stock market - a "fire sale" of a stock takes place when a stock is selling for much less than its perceived value. MGM's CEO, Jim Murren, recently said that he doesn't expect the COVID-19 pandemic to have a long-term impact on the company's business, but how long the outbreak and its economic effects last will play a big role in just how financially healthy the company comes out on the other side. These are three companies that are among the industry leaders in their respective fields -- in Simon's case, the leader. The company recently announced that it was drawing down about $16 billion from its credit lines, and it also anticipates having at least $15 million in additional cash on hand at the end of March. Since the coronavirus market downturn started, Synchrony's stock has been absolutely hammered. Follow him on Twitter to keep up with his latest work! If the COVID-19 outbreak peaks in April and companies can get back to business as usual by summer (which is quite probable), all three of these could look like insanely good bargains at the current prices. I won't sugarcoat it. All of MGM Resorts' casino properties in the United States have suspended operations, including its numerous mega resorts on the Las Vegas Strip. Will mall traffic in Simon's properties be at or near its previous levels once they reopen, or will people still be hesitant to go out in public? The stock market has rebounded, but these two stocks are still remarkably cheap. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. Even after the recent rebound fueled by the stimulus package, the Dow Jones Industrial Average is still down about 25% from its recent high. Buffett Has 78% of His Portfolio in These 5 Stocks. Data source: YCharts and company earnings reports. The stock market has rebounded, but these three stocks are still remarkably cheap. Typically, single-tenant net-lease real estate is one of the most stable types of commercial real estate you can invest in, but most major net-lease REITs have been hammered in the recent downturn. In fact, STORE Capital is down by nearly 55% from its February high. Example - during the recent 1,000 point intraday collapse of the Dow Jones Industrial Average, PG (Proctor and Gamble) momentarily lost about 25% of its value. The company recently announced a new $6 billion credit facility and now has a total of $9.5 billion in borrowing capacity. However, in a deep recession, we could see defaults rise significantly and cause the company's profits to disappear. Plus, STORE has about $700 million in liquidity, which should be plenty to allow the company to make it through the tough times. See you at the top! Now, GM certainly has enough liquidity to get through the pandemic. Plus, casino stocks (and MGM in particular) have lots of debt on their balance sheets, so this cash flow disruption can get expensive, and fast. The reason? STORE Capital is a real estate investment trust, or REIT, specializing in single-tenant properties, particularly in the retail and service industries, but there's a substantial presence of manufacturing businesses as well. The CARES Act provides much-needed (and potentially forgivable) loans to hard-hit businesses, and even if a tenant has difficulties paying rent, I'd be willing to bet the parties can come to an amicable arrangement that works best for both parties. The biggest question is how quickly their properties can reopen and how quickly tourism will get back on track. Simon Property Group is the largest retail-focused real estate investment trust, or REIT, in the market. Matt is a Certified Financial Planner based in South Carolina who has been writing for The Motley Fool since 2012. It cancelled a $1.25 billion buyback initiative, and the company had $2.4 billion of cash and investments on its balance sheet as of March 11. So, while these three stocks will likely take investors on quite a roller coaster ride in the near term, they are looking like incredibly attractive opportunities if you're measuring returns in terms of several years or more. Warren Buffett Doubles His Money on These Stocks Every 2 to 5 Years, Copyright, Trademark and Patent Information. People aren't really buying new cars right now. After all, this isn't a typical recession; it's a temporary and deliberate pause to a strong economy. (Note: The company's name stands for Single Tenant Operational Real Estate.). See you at the top! These stocks could certainly fall even more if we get some bad news along the way. Now, Synchrony also has one of the best net interest margins in the entire financial industry -- around 15% -- so it can absorb these types of losses and still remain profitable. Like with the other two companies, the question is how long the closures will last and what will happen after they reopen. When the market is having a fire sale on stocks, for example, it means that the overall market sentiment is that it is a bad time to own stocks. The key word to pay attention to is expected. Market data powered by FactSet and Web Financial Group. Having said that, it's starting to look like the economy is going to recover sooner than initially expected, and the stimulus payments and expanded unemployment benefits in the CARES Act should help most consumers stay afloat during the tough times. Let's conquer your financial goals together...faster. Why Isn't Buffett Putting More of His Cash to Work? They just are. Many of the positions were initiated by CEO Warren Buffett himself, and Buffett and his stock-picking team have an excellent track record of beating the market over long periods. Plus, GM's North American factories are closed down, so it isn't producing anything new -- in fact, GM plans to use its factorie… Figures as of March 26, 2020, at 10 a.m. EDT. To be perfectly clear, MGM Resorts' first- and second-quarter numbers are going to look horrible. Will This Big Las Vegas Player Transform Into a REIT? The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. Matt specializes in writing about bank stocks, REITs, and personal finance, but he loves any investment at the right price. P/FFO was used instead of P/E for Simon Property Group, as it's a better metric of REIT earnings. Cumulative Growth of a $10,000 Investment in Stock Advisor, 3 Stocks at Fire-Sale Prices After the Coronavirus Crash -- Are They Worth Buying? Just be aware that there's a tremendous amount of uncertainty at this point, and under a worst-case scenario, you could potentially lose your entire investment. This is a "fire sale". Plus, there's concern that many of Simon's tenants will be unable or unwilling to pay rent during the forced closures, like we recently heard from Cheesecake Factory (NASDAQ:CAKE). The company also provides specialty payments solutions and is the company behind the CareCredit healthcare credit card. With that, here's why Buffett stocks STORE Capital (NYSE:STOR) and Synchrony Financial (NYSE:SYF) are still trading at bargain prices and could be excellent choices for long-term investors. Even after a recent rebound, shares are down by more than 50% so far in 2020. Many stocks that were trading for insanely cheap prices have posted big gains, but that's not to say that there aren't some attractive bargains to be found. As you might suspect, Simon's U.S. properties are currently closed. And to be fair, it's easy to see why. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. While much of the recent news in the COVID-19 fight has been generally positive, the market will likely remain highly volatile until there's some clarity regarding when we'll get back to business. In a mid-March update, STORE's CEO revealed that many insiders have recently purchased shares, and I think they'll be happy with the move once the U.S. economy returns to normal. In all, Synchrony had more than $87 billion in loan receivables at the end of 2019.
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