Worried About the Stock Market? Take Warren Buffett’s Advice and Do This

Billionaire investor Warren Buffett has seen downturns, recessions, market crashes and all kinds of adversity in the markets over the years. Investors concerned about the markets today should take the advice of the Oracle of Omaha and simply bet on America. Even during the early stages of the pandemic, Buffett stated that “in principle, nothing can stop America”. And it is true that many American companies have weathered the pandemic and are still making great purchases today.

Three US-based stocks that investors can buy to bet on America are: seagen (SGEN -0.71%), T-Mobile USA (TMUS -1.26%)and Coca Cola (KO -0.24%). These activities can diversify your portfolio and provide solid long-term investments.

1. Seagen

Washington-based Seagen may not be a typical Buffett stock, as biotech isn’t an area he normally has exposure to in his portfolio. But Seagen’s pursuit of cancer-fighting drugs and its ability to bring multiple products to market are reasons why this would be a solid health stock to rank behind. The success means that cancer patients have better treatments available.

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Seagen is not a profitable company, with losses of $740 million over the past 12 months. But the reason the stock deserves an exception for value-oriented investors is that Seagen’s gross profit margin is an impressive 80% of sales. As the company scales its operations, there is a path for Seagen to become profitable.

During the first half of the year, Seagen generated $814.8 million in product sales (up 25% year-over-year), led by the lymphoma drug Adcetris, which raised $382.9 million. The company has more than 17 product pipelines under development this year that could fuel more growth for the company in the coming years.

Seagen is an excellent example of an American company that innovates and can grow much bigger in the coming years.

2. T-Mobile USA

T-Mobile is a top telecom company that is also based out of Washington. While it does not offer a dividend like other telecom stocks, it buys back shares, which can lead to a higher share price and gains for shareholders. This month, it announced a share repurchase program that could allow it to repurchase up to $14 billion in shares within a year. And that’s likely to be just the beginning, as the company previously said it planned to buy back up to $60 billion worth of shares between 2023 and 2025.

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The company says its 5G network now covers almost the entire country and offers more coverage than its rivals. AT&T and Verizon Communications, combined. T-Mobile posted its best-ever second quarter results, reporting record numbers for postpaid net account additions (380,000) and postpaid net customer additions (1.7 million) for the period ended June 30.

While T-Mobile posted a net loss in the second quarter, it was largely due to merger-related costs; it merged with Sprint in 2020 and it is currently in the process of dismantling Sprint’s network. With at least $5.4 billion in synergies to be gained from the merger this year, T-Mobile’s business will be leaner and more profitable going forward, and investing in the stock today could be a great step for long-term investors.

3. Coca Cola

Soft drink giant Coca-Cola is a Buffett favorite and it’s easy to see why. The Georgia-based company has grown over the years and adapted to changing consumer tastes. It now has 200 brands worldwide, including coffee, vegetable juices, water and flavored alcoholic beverages, in addition to soft drinks.

The company is a good, safe option to invest in because its products are staples in homes and will be in high demand no matter how the economy fares. Despite challenging macroeconomic conditions, including supply chain issues and rising inflation, the company delivered solid second-quarter results in July, with $11.3 billion in revenue growing 12% year over year.

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Coca-Cola is a cash rich company that has generated $10.2 billion in free cash flow in the past 12 months, which is more than enough to cover its $7.4 billion dividend payments over that period. The yield of 3% is higher than the S&P 500 1.7% on average and can be an excellent source of recurring income in the long run as this Dividend King has increased its payouts for 60 consecutive years.

Whether you buy Coca-Cola stock for the dividend or for its financial strength and resilience, this is an investment you can buy and forget about for a long time to come.

David Jagielski has no position in any of the listed stocks. The Motley Fool holds positions in and recommends Seagen Inc. at. The Motley Fool recommends T-Mobile US and Verizon Communications and recommends the following options: Long January 2024 calling $47.50 on Coca-Cola. The Motley Fool has a disclosure policy.

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