With increased volatility rocking the markets this year, it’s more important than ever for investors to ensure their portfolios are allocated across a balanced mix of stable, blue-chip stocks and higher growth opportunities. While the majority of your holdings should be devoted to established, dividend-paying companies, I believe carving out a portion for reasonably-priced growth stocks with long growth runways can enhance overall returns. The key is finding a personalized balance of low-risk, slow-and-steady stocks and selectively picking faster-growing companies poised to outperform over the long term.
This fall, there are seven stocks I have my eye on that I believe have the potential to generate market-beating returns over an extended time horizon while still being responsibly valued.
Rather than chasing extremes, I recommend investors build a firm foundation with established names that will stand the test of time. Allocating a portion to reasonably-priced innovators and market leaders expanding within secular growth trends can provide outsized growth to complement a core of sturdy blue chips. A balanced approach focused on enduring quality and growth at a reasonable price has the potential to yield strong returns for patient investors this fall and for years to come.
With that said, here are seven long-term stocks to buy this Fall.
Berkshire Hathaway (BRK-A, BRK-B)
A conglomerate led by legendary investor Warren Buffett, Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) provides broad exposure to a diversified collection of mature businesses as well as a massive $147 billion cash pile to be deployed opportunistically. Berkshire’s operating businesses, including insurers like GEICO and General Re, BNSF Railroad, and industrial manufacturers, deliver consistent earnings, enabling Berkshire to generate ample free cash flow.
Berkshire can then allocate this cash between stock buybacks, acquisitions, and its equity portfolio of market leaders, including Apple (NASDAQ:AAPL), Bank of America (NYSE:BOA), and Coca-Cola (NYSE:KO). With Buffett at the helm, investors benefit from being passively invested alongside the world’s greatest capital allocator and his proven strategy of buying wonderful companies at fair prices. Berkshire’s financial strength and flexibility allow Buffett to make big long-term bets in turbulent markets when others are paralyzed. With over $1 trillion in total assets, Berkshire’s portfolio also grants investors diversification across sectors.
The company’s financials are also stellar, but given Berkshire’s status as a holding company, these financials aren’t easily comparable to its peers. That said, most investors remain very confident about Berkshire, even during turbulent times. Thus, hold BRK stock and let Buffett do the money making for you.
Since we are talking about the long-term here, Warren Buffett and Charlie Munger may not be around for the entirety of your holding period. But they have built an excellent portfolio and a management team that can keep Berkshire Hathaway running in the same fashion for decades to come.
Lockheed Martin (LMT)
With military budgets ramping up significantly across NATO counties in response to Russia’s invasion of Ukraine, Lockheed Martin (NYSE:LMT) finds itself well-positioned to capitalize on surging demand. As a preeminent global aerospace and defense contractor, Lockheed Martin produces advanced weaponry and cutting-edge combat systems, including the ubiquitous F-35 fighter jet.
In its latest quarter, Lockheed Martin grew sales by 8% and achieved a record backlog, demonstrating strong fundamental momentum. Critically, nearly two-thirds of Lockheed Martin’s backlog consists of orders from the U.S. Department of Defense and Congress, granting high visibility into future revenues. It has now swelled to $158 billion.
Looking ahead, Lockheed Martin expects to deliver steady mid-single-digit growth in sales through 2027, driven by restocking military inventories, allies increasing defense budgets, and classified aviation programs. Meanwhile, Lockheed Martin’s triple-A balance sheet supports consistent dividend growth and facilitates further strategic acquisitions. With military conflict regrettably now top of mind for Western governments, Lockheed Martin is well-positioned to fortify national security while producing durable returns for shareholders.
Ammo, Inc. (POWW)
The surge in geopolitical conflicts has created unprecedented pressure on global ammunition supplies, with U.S. allies dramatically increasing orders to rebuild depleted inventories. Ammo, Inc. (NASDAQ:POWW) is a niche small-cap company focused on designing, manufacturing, and selling high-performance ammunition and components that are perfectly leveraged to ride this wave. While Ammo, Inc.’s stock has retreated over 78% from 2021 highs during the broad market correction, the company just delivered a profitable quarter after four straight losses.
Importantly, Ammo, Inc. is strategically shifting its business mix toward higher-margin brass casings for OEM channels and away from lower-margin finished ammo. With stronger fundamentals and leaner operations, Ammo, Inc. believes it can expand gross margins significantly from current levels.
Meanwhile, Ammo, Inc.’s gunbroker.com online marketplace continues gaining traction and introducing new technology improvements. Though still facing macroeconomic headwinds, Ammo, Inc. is making the right moves to improve profitability and capture surging ammunition demand as markets recover. After declining from euphoric levels, you can purchase this micro-cap supplier at a bargain valuation before sentiments improve. The consensus price target of $3 implies 48% upside potential for AMMO stock over the next year.
Union Pacific (UNP)
The United States possesses the largest rail network in the world, spanning nearly 160,000 miles across the country and transporting 40% of America’s freight each year. However, much of the rail network consists of industrial lines dedicated to transporting raw materials rather than passenger transit, meaning its importance often goes unrecognized. This is where Union Pacific (NYSE:UNP) comes in. As one of the largest Class I railroads with 32,500 route miles covering 23 states, Union Pacific is a stalwart of U.S. industry, connecting businesses across the country.
I have mixed feelings with this stock. On the positive side, Union Pacific has grown revenues substantially and currently has over $24 billion in annual sales. Importantly, Union Pacific converts a quarter of those sales into free cash flow, enabling a secure dividend with a 2.5% yield. The company has raised its dividend annually for 16 consecutive years, and I believe this is a cash cow that’ll deliver solid total returns if you keep reinvesting those dividends and cash out.
However, the company’s recent dip in revenue and earnings, combined with concerns about labor, are driving bearish sentiment with this stock. In response, UNP stock has pulled back, but I believe the negatives are more than priced in right now. Union Pacific’s sales and profits are expected to rebound next year, with revenue and earnings per share expected to grow between 5% and 10% annually for the foreseeable future. As for labor concerns, unemployment is already showing signs of increasing, and with the rise of undocumented migration from the south, I don’t believe UNP will feel too much of a pinch.
Walt Disney (DIS)
Disney (NYSE:DIS) has seen its stock price decline dramatically, falling over 56% from its March 2021 peak. However, the company’s robust collection of assets and brands, including Marvel, Pixar, ESPN, and its theme parks, position it well for the long-run once macroeconomic headwinds subside.
Disney is undergoing a significant restructuring led by returning CEO Bob Iger to focus on streaming and improving cost efficiencies. Though the transition brings near-term pain as linear networks face cord-cutting pressures, Disney’s unrivaled IP and global reach provide ample opportunities ahead. Its theme parks business continues to perform well, while new Disney+ subscription tiers with ads aim to improve the economics of the company’s streaming business.
With the stock trading at just over 23-times forward earnings, Disney seems attractively valued for long-term investors. Its trailing price-to-earnings multiple has not been this low since 2015. Once economic conditions improve, pent-up demand for experiences like travel and theme parks should benefit Disney even more. Buying Disney at today’s levels could yield a significant upside over time for investors with a long time horizon.
Analysts expect the company’s top line to expand by 6% annually through 2028, and believe its earnings per share can pull off 33% growth next year. Notably, analysts also expect earnings per share growth to hold just below 20% through 2027.
Costco (NASDAQ:COST) has been one of the best-performing retail stocks, with its share price up over 24% year-to-date while many retail peers have tumbled. Its membership model provides resilient revenues, and the company’s focus on value has helped its bottom line during this period of high inflation.
With renewal rates recently hitting all-time highs around 93%, Costco can selectively raise membership fees while opening new warehouse locations to drive growth. Its subscription-based business is recession-resistant, while growth initiatives in e-commerce, healthcare, travel, and business services present further upside.
Trading at 39-times forward earnings, Costco does merit a premium valuation given its strong performance, but I don’t think its too much of a negative. Over the past five years, it has grown earnings per share at an 16.6% annualized pace. Costco operates with razor-thin margins, but makes up for it with sheer volume and scale. With over 118 million member households worldwide, Costco has substantial purchasing power to secure great deals and pass savings to customers.
I believe Costco has proven adept at adapting to economic conditions and changing consumer behaviors. It provides a low-risk way to invest in resilient staples like food and gas, while also benefiting from discretionary purchases as wages rise. Can it sustain the current trajectory in the stock market? Probably not. But if you’re in it for the long-run, it is worth waiting through any near-term pain since you’re also getting a small 0.7% dividend yield.
Microsoft (NASDAQ:MSFT) is the only tech stock on this list, but that’s because Berkshire Hathaway already provides wide exposure across Apple, Amazon (NASDAQ:AMZN), and other tech giants. However, Berkshire does not hold Microsoft, a diversified technology leader firing on all cylinders across software, hardware, cloud, AI, and more futuristic pursuits like quantum computing.
Microsoft’s Azure cloud platform sees strong growth as digital transformation continues, while new initiatives in AI with its ChatGPT integration and metaverse technologies providing massive growth runways. And then there’s Windows and Microsoft Office, both of which are something that the white-collar sector cannot live without.
With a reasonable valuation of 30-times forward earnings, I believe Microsoft is a blue chip worth buying and holding for decades, given its broad capabilities and innovative roadmap. Over the past year, Microsoft generated over $59.4 billion in free cash flow, providing resources to invest in more high-growth tech. Analysts still expect Microsoft’s top line to expand by over 10% on average this decade.
On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.