My 3 Favorite Stocks to Buy Right Now

With the overall market still trading at frothy levels following its 35% run-up from April's low, it's tough to get too excited about buying much of anything right now. Most stocks are just uncomfortably expensive here.

Not every stock, though. A handful of attractive prospects have been underperformers of late, translating into long-term buying opportunities.

Here are my three picks of that litter.

1. Dutch Bros

For three decades, Starbucks has dominated the nation's coffeehouse landscape; it's done pretty well overseas, too. And deservedly so. The company offered a familiar premium coffee experience at each of its locales, delivering what consumers at the time wanted most.

Times are changing, though. So are consumers' tastes. This posh and polished experience is decreasingly marketable. People want something more casual, personal, and convenient.

That's what Dutch Bros (NYSE: BROS) offers. In many ways, it's the un-Starbucks: no sit-down stores among its 1,043 locations. The company only operates drive-thru kiosks, where customers can enjoy a personal conversation with the employees; its baristas are called "broistas" for a reason.

And it works. Millennials and Gen-Z consumers crave this kind of casual authenticity, so much so that Dutch Bros has been able to double its store count over the past four years. This is still just the beginning, too.

With former Starbucks executive Christine Barone now at the helm as CEO, the company recently increased its long-term goal of having 4,000 locales to 7,000. It will take many years to reach that target. It is possible, however, and even likely, given the generational differences that are driving demand for its drive-thru beverage service.

For perspective, Starbucks currently operates about 18,300 domestic stores but is closing hundreds of them. This retreat is not only a sign that rivals are chipping away at the titan's dominance, but is also a prime opportunity for Dutch Bros to fill the void now being created by Starbucks' closures.

2. MercadoLibre

MercadoLibre (NASDAQ: MELI) is often referred to as the Amazon of Latin America, and understandably so. The description doesn't quite do the company justice, though.

It doesn't enjoy the same share of Latin America's highly fragmented e-commerce market that Amazon does in North America, but MercadoLibre is the dominant e-commerce name in the region largely due to its sheer breadth and depth.

Online shopping, payment processing, brick-and-mortar retail logistics, and more are all in its wheelhouse. It even recently acquired a brick-and-mortar drugstore, doubling down in its nascent online pharmacy business that looks a whole lot like Amazon's PillPack. The ultimate goal is the same as Amazon's, too: establishing yet another point of contact with consumers that can then be leveraged into a more fruitful relationship.

Its stock hasn't been a particularly great performer of late. Shares are down 15% since late last month, despite second-quarter sales growth of 34% to $6.8 billion that extends well-established growth trends.

Concerns over international trade friction and improved competition account for most of the recent weakness, although shares have been vulnerable since August, when the company reported unexpectedly high costs stemming from free shipping offered to more of Brazil's online shoppers.

That ultimately caused the company to fall short of its second-quarter earnings estimates. Investors may be afraid this could become the new norm, taking a similar toll on its bottom line that the expansion of Amazon Prime's free shipping took on its profitability.

That wouldn't necessarily be a bad thing, however. Given just how dominant Amazon became thanks to Prime's free shipping perks, that might be precisely what MercadoLibre's shareholders want to see it continue doing.

Analysts are optimistic, anyway. The vast majority of them currently consider the stock a strong buy, with a consensus target of $2,896.83 that's 35% above the present price.

3. Netflix

Lastly, I'm adding streaming giant Netflix (NASDAQ: NFLX) to my list of favorite stocks to buy right now.

The streaming industry's highest-growth days are in the rearview mirror. I contend that the chief reason Netflix and many other streaming services stopped reporting their subscriber head counts is because they know their growth is slowing, if not downright halted. That's why I'm not looking for sustained double-digit growth from this company in the distant future, even as it gets better at cultivating its advertising business.

What Netflix lacks in raw long-term growth firepower, however, it more than makes up for in sheer dominance of its industry.

Nielsen ratings show that as of last month, Netflix accounted for 8.3% of all viewing time among U.S. streaming services, nearly double that of its nearest competitor, Walt Disney (and Disney's figure combines Hulu and Disney+).

The only streaming platform that's watched more within the U.S. is YouTube, but being mostly ad-supported, it's not exactly an apples-to-apples comparison. Or as recent data from Pew Research suggests, of the 83% of Americans that subscribe to any streaming service, a market-leading 72% of them are likely to have access to Netflix, and then something else, outpacing Prime's share of 67%.

Netflix is not quite as dominant outside of North America, but it was still doing pretty well overseas before it stopped reporting subscriber figures at the beginning of this year.

And this dominance of the business is a big deal even if the industry's growth itself is apt to slow from here. It allows Netflix to forge the bundling partnerships it wants, and on its own terms; its competitors need Netflix more than Netflix needs any competitors.

This dominance also allows Netflix to set the standard for the ad-supported sliver of the streaming business. Wedbush media analyst Alicia Reese recently wrote: "As Netflix continues to enhance its ads business by expanding partnerships, improving targeting, and adding more live content, its aim of doubling ads revenue this year is entirely achievable. More importantly, we expect ad revenue to become Netflix's primary revenue driver beginning in 2026."

The company is also a cash cow that's quietly been building shareholder value by buying back stock since 2021.

Bottom line? If you invest in quality companies, everything eventually takes care of itself. Even if Netflix isn't going to remain a high-growth business forever, it is most definitely a quality company with real durability. The stock's recent weakness is a window of opportunity that isn't likely to remain open much longer.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, MercadoLibre, Netflix, Starbucks, and Walt Disney. The Motley Fool recommends Dutch Bros. The Motley Fool has a disclosure policy.