Top stock strategist reveals his three favorite companies to invest in

A chief equity strategist and stock market expert shared the top three companies to invest in and what sets them apart from the rest.

Robert Doll revealed that his favorite stocks are Cigna (CI), American Express (AXP) and Lowe’s (LOW), he said The Kansas City star.

In a “momentum-driven” economy, Doll is confident in these companies for several reasons, including short- and long-term gains for investors.

Healthcare and insurance company Cigna “has great fundamentals at a lower price point,” Doll told the outlet. He also explained that the price-earnings ratio of the stock is more than 30 percent lower than the market.

Stock market numbers displayed on the New York Stock Exchange (stock image)

Cigna’s annual growth projection is 10 percent, based on dividends and profits.

The advantage of investing in credit card company American Express is that it has an “affluent customer base” compared to its competitors, Doll said.

He explained that increasing membership and usage is associated with increasing net interest income.

Doll told The Kansas City Star, “So it should face fewer problems in an economic downturn. It is sold at a (high) valuation of 20 times earnings.

“So hold your nose and buy.”

Doll recommended healthcare and insurance company Cigna as one of the best stocks to invest in

Lowe’s is the largest home improvement company in America after Home Depot. But Doll suggests people invest in Lowe’s because “it has generated good revenue.”

Home Depot is making more profits overall, but Lowe’s is closing its profit gap and making improvements to their business. Doll essentially said the company’s finances are in good shape.

The only disadvantage Doll indicated was for Cigna. He said the “key risk” is that the stock’s cost-to-revenue ratio slowly increases.

Doll also gave general advice on the types of stocks people should be looking at, and what he thinks the future of the stock market holds.

Credit card company American Express has a ‘prosperous customer base’ according to Doll

He told The Kansas City Star: “Predicting the end of it is a fool’s game – impossible.

‘Bears say the economy is weakening and earnings expectations are too high. They say consumers are slowing down, as evidenced by falling confidence and rising debt.

“I’m careful, even though I’m not a bear.”

A ‘bear’ is an investor with a negative view of the stock market. They expect a rapid decline in the near future.

But Doll said he expects a 10 percent market correction in the coming months, causing stock prices to drop significantly.

Home improvement store Lowe’s is a good investment option because it’s closing its profit gap, Doll says

The carefully optimistic investor favors financial stocks because “they are cheap relative to their history” and are in “better shape” than normal during this part of the stock cycle.

The stock market is currently in the ‘markdown’ or ‘decline’ phase of its cycle Funds for all seasons.

Doll emphasized that high profits and predictability are more important to focus on than the specific sector in which someone invests.