My 3 Favorite Stocks to Buy Right Now

The market's current state is a classic setup for value investing. While the S&P 500 touched record highs in August, investors remain gripped by fear over tariffs and economic growth, creating extreme volatility. This environment, where macroeconomic anxiety overshadows company fundamentals, often produces the most compelling opportunities. Traditional value arises when a stock trades below its intrinsic value due to an overreaction to a specific company trouble, not because of an unresolvable policy debate. The effective strategy is to focus on what is researchable: company-specific factors that can be analyzed and understood, rather than trying to predict the unpredictable.

The first step is to recognize what can be studied-and what cannot. It is ineffective to try and forecast the final tariff levels or the precise path of inflation and interest rates in this fluid environment. Instead, value investors must narrow their lens to company-specific issues. Look for businesses undergoing positive change, like Walmart's efforts to fix its e-commerce profitability through third-party resellers and better logistics. Study the sustainability of a company's competitive advantages, such as Charles Schwab's low-cost structure and strong asset-gathering power, which can drive earnings growth regardless of sector-wide uncertainty. Also, assess whether industry dynamics are improving, as seen in healthcare's long-term R&D spending or agriculture equipment's productivity gains, which can fuel growth that outpaces GDP.

This framework shifts the focus from macroeconomic forecasts to a deeper analysis of business quality and change. It means identifying companies that are better equipped to navigate the current policy clouds, not because they are immune to them, but because they possess durable advantages or are executing a credible turnaround. In 2025, the value universe has expanded beyond traditional sectors, with industrials and technology stocks now playing a larger role. The hunt for value isn't easy, but it is possible. It requires a new mindset: one that sees market overreactions to company-specific troubles as the source of opportunity, not a reason to retreat.

Constellation Brands: A Deep Value Opportunity in Consumer Staples

Constellation Brands presents a classic deep-value setup, trading at a steep discount to its intrinsic worth while operating a business with a durable competitive advantage. The stock's recent performance-down roughly -has created a significant margin of safety, . This gap between price and value is the core of the opportunity, but it is only compelling because the underlying business is a wide-moat compounder.

Morningstar's classification confirms the quality of the moat. Constellation is a constituent of the , a list of high-quality companies trading at the cheapest prices relative to their fair value estimates. As of September, it was the most undervalued wide-moat stock on that list, trading . The company's moat is built on iconic, premium brands like Corona, Modelo, and Svedka, which create powerful switching costs and pricing power. These brands are not just products; they are cultural assets that allow Constellation to maintain strong margins and weather economic cycles better than commodity producers.

The recent underperformance appears to be driven by a temporary shift in consumer demand and portfolio concerns, rather than a deterioration of the moat. Headlines about premium alcohol brands facing pressure as wallets tighten have spooked investors, leading to a sharp sell-off. Yet this is the kind of volatility that separates the patient value investor from the crowd. The DCF model's projection of Free Cash Flow growing from about $1.63 billion to over $2.8 billion by 2035 assumes the business continues to generate cash at a high rate, a function of its brand strength and scale. The current price does not reflect that future cash flow; it reflects fear.

For a long-term investor, the setup is straightforward. You are buying a high-quality business with a wide moat at a price that implies a major error in the market's assessment of its future. The margin of safety is large, and the business model is designed to compound value over decades. The risk is that consumer demand shifts persist longer than expected, but the evidence suggests the brands themselves are resilient. The opportunity is to own a piece of that durable advantage at a fraction of its estimated worth.

Deere & Co.: A Quality Business at a Reasonable Price

Deere & Company presents a classic value investing opportunity: a high-quality business trading at a significant discount to its intrinsic worth. The company's wide economic moat, built on technological leadership in precision agriculture, high switching costs for farmers, and a powerful global brand, allows it to command premium pricing and generate durable profits. This competitive fortress is the bedrock of its long-term compounding power.

The valuation tells a clear story of a market mispricing. A discounted cash flow model estimates Deere's fair value at $629.37, a figure that places the current share price of around $470 in a striking discount. The stock is trading significantly below fair value by more than 20%. This gap is the core of the investment case. Yet, the market's skepticism is reflected in the stock's recent performance, with shares down roughly . This decline appears to be driven by cyclical concerns-farm income volatility and equipment replacement cycles-rather than a deterioration in the company's fundamental advantages.

The tension between price and quality is most apparent in the P/E ratio. Deere's forward P/E of 25.3x is considered expensive relative to its peer average of 23.9x. However, this metric alone misses the point. The company's wide moat and robust growth prospects justify a premium. The real value lies in the DCF's conclusion: the market is pricing in a lower future cash flow stream than the model, based on current earnings, suggests is possible. In other words, the stock's price reflects a pessimistic view of the cycle, while the business model remains fundamentally strong.

For a disciplined investor, this setup is ideal. The company's moat provides a buffer against economic downturns and competitive threats, allowing it to maintain profitability and reinvest in its technology. The current price offers a margin of safety against that cycle. The bottom line is that Deere is a high-quality business with a durable competitive advantage, and its stock is trading at a reasonable price relative to its long-term earning power. The market's focus on near-term headwinds has created a compelling entry point for those with a long-term horizon.

Nike: A Wide-Moat Consumer Champion Trading at a Discount

Nike is a classic wide-moat consumer brand, and its current price suggests the market is pricing it as if that moat is eroding. The company's competitive advantages are deep and durable. It possesses a powerful global brand identity, a dominant retail network, and high switching costs for its loyal customer base. These factors have historically allowed Nike to maintain pricing power and defend its market position for decades. Morningstar's recognition of Nike as a wide-moat company is a key validation of this enduring strength.

Yet the stock trades at a significant discount to its estimated intrinsic value. A discounted cash flow model, which projects Nike's future cash flows and discounts them back to the present, arrives at a fair value of . With the stock recently around $64, . This is a substantial margin of safety, the cornerstone of value investing. The model's range of $68.15 to $157.46 underscores the uncertainty, but the central estimate points to a clear undervaluation.

The recent decline-shares are down roughly 13% over the past year-appears to be a reaction to a temporary slowdown in growth, not a fundamental deterioration of the business. The stock's inclusion in the Morningstar Wide Moat Focus Index as of September 2025, which tracks wide-moat companies trading at the lowest prices relative to fair value, further highlights this disconnect. The index's methodology is built on the principle that high-quality companies with durable advantages often become temporarily cheap, creating fertile ground for long-term investors.

The bottom line is a compelling setup. Nike's wide moat, derived from its brand, network, and customer loyalty, remains intact. The current price, however, seems to be pricing in a permanent slowdown or a loss of competitive edge that the company's history does not support. For a disciplined investor, this represents a classic opportunity: buying a high-quality business at a price that offers a large buffer against error and a path to significant long-term compounding.

Why These Are 'Favorite' Stocks for a Value Investor

For a value investor, the ideal opportunity combines a durable competitive advantage with a significant margin of safety. The three companies highlighted-Deere, Constellation Brands, and Nike-represent a diversified basket of high-quality businesses that meet this standard. Each possesses a wide, researchable economic moat that is expected to endure for decades, providing a durable foundation for compounding. More importantly, all trade at substantial discounts to their estimated intrinsic values, creating the margin of safety that buffers against uncertainty and error.

Deere & Company exemplifies a wide moat in the industrial sector. Its advantage stems from a powerful combination of brand loyalty, high switching costs for farmers, and a global service network that is difficult for competitors to replicate. This moat is reflected in its consistent profitability and strong balance sheet. The stock, , , . This valuation gap suggests the market is pricing in near-term cyclical headwinds or growth concerns, while overlooking the company's long-term pricing power and capital discipline.

Constellation Brands presents a similar profile in consumer staples, with a wide moat built on iconic brands like Corona and Modelo, which command premium pricing and customer loyalty. . . This deep discount appears to be driven by short-term consumer demand shifts and debate over premium brand resilience, factors that may be overblown relative to the company's long-term brand strength and cash-generating ability.

Nike rounds out the trio with a powerful brand moat in consumer discretionary. Its global recognition, direct-to-consumer strategy, and innovation pipeline create significant barriers to entry. The stock, , , . This valuation gap suggests the market is discounting the company's growth potential, perhaps due to macroeconomic concerns or competitive pressures, while ignoring the durability of its brand and its expanding digital ecosystem.

Together, these three companies form a diversified portfolio of wide-moat businesses across industrials, consumer staples, and consumer discretionary. Their current prices offer a margin of safety that is not typically found in high-flying growth stocks. For a patient investor, this combination of durable competitive advantages and attractive valuations provides a fertile ground for long-term compounding.