The fear of a recession has increased in recent weeks. Investors are uncertain over the impact of tariffs and trade policy on the economy. However, investors who buy companies that largely provide goods and services domestically should hold up far better.
Most of today’s big trends still remain in place. As long as that holds, patient investors who buy great companies playing to long-term trends should be able to make good returns buying sold-off stocks today.
For instance, utility companies tend to be defensive players under most market conditions. With the rise of AI and data center demand, they’ve also become a better growth play for the first time in decades.
Renewable energy utility producer Constellation Energy (CEG) is well positioned, with a mix of natural gas, nuclear, hydroelectric, and even wind and solar.
Shares have been knocked down 22% over the past six months, pushing shares down to a reasonable 17 times earnings.
Action to take: Long-term investors may like shares here. Constellation plays well to rising energy demand, and renewables could boost returns as they come back into favor with the market.
At current prices, Constellation also pays a 0.9% dividend. While on the lower side for a utility, that’s offset by higher growth potential.
For traders, the August $230 calls, last trading for about $21.50, could see mid-double-digit returns on a push higher on shares in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.