U.S. stock markets entered correction territory in late August, with the Dow Jones falling more than 14% from its yearly highs.
But instead of leaving the market, we looked for some of the best stocks to buy now that are trading at "discount prices."
While many investors were tempted to take their money to the sidelines, that is the wrong move. You see, if you run for the exits, you'll miss out on some sizable profits when markets inevitably rebound from the latest slump.
Instead, look at great stocks "on sale" right now. In fact, we recommend having a ready at all-time list of quality, must-have shares to pick up at "fire sale" prices during sell-offs.
Here are three of the best stocks to buy now at discounted prices...
Top Stocks to Buy Now No. 1: General Electric Co. (NYSE GE)
General Electric Co. (NYSE: GE) shares are trading near $24.70 and are down roughly 15% from April highs.
According to Money Morning Executive Editor Bill Patalon, this is an excellent opportunity for picking up shares in GE. One of the biggest reasons he recommends GE shares is the diversification of its products.
"GE is in several growth segments: Aircraft engines, medical-imaging equipment, power generation, water treatment and, as a great special 'kicker' - the 'Internet of Everything' (IoE)," Patalon said. "Demand in each of those sectors is only going to grow, so GE can take comfort in knowing there will be plenty of demand for its wares long term."
Another bullish sign for GE stock is insider buying. According to Patalon, that is the "single-biggest indicator that a stock is going to move higher."
In 2014, CEO Jeffrey Immelt bought an additional 40,000 shares of GE. That brought his total investment to more than $47 million worth of GE stock. And he wasn't the only one. Two other independent GE directors also scooped up 14,000 shares combined that year.
Corporate insiders sell their company's shares for many reasons, he explained, but buy for only one: "They see a chance to make money on their own stock."
Another key draw is GE's 3.7% dividend yield and commitment to increasing payouts.
Continue reading for two more of the top stocks to buy now...
Top Stock to Buy No. 2: Apple Inc. (Nasdaq: AAPL)
At this week's product event, Apple Inc. (Nasdaq: AAPL) unveiled a new TV set-top box that responds to voice commands. It also announced new iPhones that sense the pressure of a finger tap.
The new iPhones also come with a better camera, faster chips, and new colors. The iPhone has been AAPL's real cash cow, accounting for as much as 68% of the company's revenue over the last six years
Apple also launched a new, larger iPad with business friendly credentials.
Investor reaction, however, was muted. But that's typical of Apple rollouts. According to BTIG Research data, Apple shares have lost an average of 0.4% on the day of iPhone announcements over the last three years.
AAPL stock has fallen 5.7% in the last month, but according to Money Morning Defense & Tech Specialist Michael A. Robinson, the sell-off was exaggerated by concerns about iPhone sales in China.
"Savvy long-term investors can turn this to their advantage," Robinson said.
Apple now trades at 11.5 times forward earnings, which is a 43% discount to the Nasdaq, according to The Wall Street Journal.
Stripping out its $148 billion in net cash, that multiple slips to about 9.2 times. That's cheap for a company that has returned $50.7 billion in net earnings over the last 12 months, a 32% year-over-year increase.
AAPL stock opened today at $110.27.
Top Stock to Buy No. 3: Gilead Sciences Inc. (Nasdaq: GILD)
Gilead Sciences Inc. (Nasdaq: GILD) has enjoyed unprecedented success with its highly effective treatment for hepatitis C, Sovaldi.
Sovaldi generated roughly $10.3 billion in sales in 2014, its first year on the market. Gilead's second successful hepatitis C drug, Harvoni, debuted at the end of 2014 and took in $2.1 billion in sales.
That combined $12.4 billion is just slightly less than the $12.5 billion AbbVie Inc. (NYSE: ABBV) generated in 2014 for Humira, an anti-inflammatory that holds the crown for the best-selling drug ever.
Still, some investors are concerned about Gilead's stock because the company is facing increasing competition for hepatitis C drugs.
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"But Harvoni ranks as the most effective drug in its class and is targeting a large market," Robinson explains. "The Centers for Disease Control and Prevention recommend that all 76.5 million U.S. baby boomers get tested for hepatitis C. Moreover, the company has at least 36 new drugs in its clinical pipeline, including three that are close to getting approval from the U.S. Food and Drug Administration."
GILD has reported triple-digit earnings growth in four of the last six quarters. Over the past three years, it has grown per-share earnings by an average 91% and boasts a 99% return on stockholders' equity.
GILD stock has fallen 7.4% in the last month, creating a great buying opportunity. Despite the recent drop, GILD stock remains one of the best stocks to buy on the market and is still up 14.5% this year. It opened today at $104.
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