11 Best Conglomerate Stocks to Buy Now

Omer Farooq
9 min read

In This Article:

In this article, we will take a look at the 11 best conglomerate stocks to buy now. If you want to explore similar stocks, you can also take a look at 5 Best Conglomerate Stocks to Buy Now.

Conglomerates are corporations that own and operate multiple diverse businesses, encompassing industries such as manufacturing, finance, technology, energy, retail, and entertainment. These companies acquire subsidiaries through mergers and acquisitions to expand their operations and diversify revenue streams.

Investing in conglomerates provides a unique advantage by offering exposure to various sectors under one umbrella. By leveraging synergies between subsidiaries, conglomerates generate efficiencies, unlock new revenue streams, and navigate economic cycles more effectively. This inherent diversification reduces the impact of industry-specific risks and provides stability amid market volatility.

Portfolio Manager Expects More Volatility Ahead

On April 26 PIMCO's portfolio manager, Erin Browne, appeared in an interview on CNBC where she discussed the current market environment and her market outlook. According to Browne, the market is not accurately priced for what lies ahead in the economy. She pointed out that the market is still positive, with the S&P trading near 4,100, up roughly 6.25% on a year-to-date basis. Browne thinks that that there is not a widespread sentiment of panic or concern among investors since valuations remain relatively high, trading at around 18.5 times forward earnings. Browne thinks that volatility is likely to rise in the back half of 2023, due to the presence of significant risks that are not adequately priced into the market. Here is what she said:

"As we start to see debt ceiling really come front and center and discussed in the market, as you start to see the economy roll even harder, I do think that volatility sub-20 is pretty remarkable. And I would expect to see that you would be trading in a more normalized 20 to 30 range over the course of the next six months or so. So from here, I would be betting on volatility moving higher. There's a lot of risk on the horizon, and the market's really not priced for that risk."

An area of the market that Erin Browne is particularly bullish on right now is large-cap banks. She thinks that the "globally systemically important banks" will benefit from the weakness in deposit flows and lending in small banks, since they will be able to "step in and take advantage of dislocations in the market" by purchasing assets that small banks are offloading. Erin thinks that large banks will drive outperformance in the medium to long term, even if they experience short-term losses. She suggests that investing in large-cap banks right now can lead to long-term benefits due to capital outflows from smaller banks and opportunities for asset acquisitions.

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