16.1 C
New York
Tuesday, May 24, 2022

3 Growth Stocks to Buy During a Biden Bear Market

- Advertisement -
- Advertisement -

Bear in a suit faces a price drop Stock market crash Stock market crash

Important points

  • Although bear markets can scare you in the short term, they are an ideal time to invest your money.

  • These fast-growing stocks tick all the boxes for patient investors.

When President Joe Biden took office just over a year ago, the stars aligned perfectly for a prolonged rally. Federal Reserve Chairman Jerome Powell had aimed to keep interest rates at record lows through 2023, and there was optimism that Biden’s multibillion-dollar infrastructure spending package, known as “Build Back Better,” would spur a variety of sectors. and industries.

But less than 14 months later, Powell will raise interest rates to combat the highest rate of inflation in four decades. Meanwhile, Biden’s infrastructure spending bill failed in Congress. Combining these factors with the uncertainties surrounding COVID-19 and the ongoing conflict between Russia and Ukraine, it is perhaps not surprising that high growth Nasdaq Composite plunged into a bear market (meaning a drop of at least 20% from its closing high) in the past week.

While bear markets can be disconcerting, they are historically a great time to invest in innovative, fast-growing companies. Eventually, every bear market was replaced by a bull market.

That’s why the following three growth stocks are the perfect complement for patient investors in a Biden bear market.

nooo

While supply chain concerns have spooked short-term auto stock investors, the long-term future for electric vehicle (EV) manufacturers is incredibly bright. That’s why any significant pullback is a good opportunity to buy shares in the fast-growing electric vehicle stock. nooo (WKN: A2N4PB, -9.57%) to join.

Faced with an expected shortage of semiconductor chips, the expansion of Nio and its EV competitors has been temporarily slowed. However, that did not stop the company from showing its potential in the fourth quarter. Despite supply chain issues, Nio topped 10,000 in November and December, approaching an annual delivery rate of 130,000 EVs. Management believes a delivery rate of 600,000 electric vehicles by the end of 2022 is possible.

Nio causes a stir when it comes to innovation. This innovation comes in many forms. The company’s recently introduced ET7 and ET5 sedans, for example, offer premium battery packs that increase range to around 620 miles. This makes the ET7 and ET5 direct competitors to the premium Model S and the cheaper Model 3. tesla motors.

Plus, the company’s Battery-as-a-Service (BaaS) program is just amazing. With BaaS, buyers receive a discount off the original purchase price of their vehicle and have the option to charge, change or upgrade their batteries. In exchange, they pay Nio a monthly fee. While Nio forgoes short-term revenue, it generates more consistent long-term revenue and ensures brand loyalty from its first buyers.

Nio is expected to be profitable on a recurring basis by 2023 at the latest. That makes the company a bona fide purchase at the current price.

Novavax

One of the best things about health care stocks is that they don’t depend on the stock market going up to do well. Because people don’t get to choose when they get sick or what illnesses they get, there is always a demand for prescription drugs, medical devices, and healthcare services. That is why the rapidly growing biotech stock Novavax (NYSE:PKMZ, -6.15%) a smart buy for the Biden bear market.

Novavax is best known for its COVID-19 vaccine, NVX-CoV2373. The company has conducted three large-scale trials of its lead vaccine. Two studies in adults (UK and US/Mexico) showed vaccine efficacy (VE) to be 89.7% and 90.4%. The third most recent study, involving adolescents ages 12 to 17, found an EV of 82% when the delta variant was most common. Few COVID-19 vaccines have reached the 90% EV threshold across all studies. This should allow Novavax to become a major player in primary and booster vaccines.

Investors may also get a good deal from Novavax due to short-term delays in filing applications and problems ramping up production. Application submission delays have now been overcome as the company focuses on increasing its production capacity.

Additionally, Novavax has the ability to develop combination vaccines that get to market faster than the competition. Imagine if you could get an annual booster shot against the flu and COVID-19 at the same time.

Novavax is on track to nearly quadruple its revenue by 2022, less than four times Wall Street’s projected earnings for this year. That is what I would call a solid buy in the Biden bear market.

Crowd Strike Exploits

The third growth stock to buy during the Biden bear market is the cybersecurity company. Crowd Strike Exploits (WKN: A2PK2R, -0.25%).

If you spot a trend here, it’s that certain fast-growing industries are mostly or totally immune to wild swings in the stock market. Cybersecurity is another one of these industries. The fact that Wall Street had a bad day won’t stop hackers and robots from stealing corporate and consumer data. This means that cybersecurity has become a critical need for businesses of all sizes.

Falcon’s cloud-native security platform is what defines CrowdStrike. Falcon is powered by artificial intelligence (AI) and monitors more than 1 billion events daily. Because Falcon is built in the cloud and relies on AI, it can detect and respond to threats more effectively than traditional on-premises solutions. This high-quality endpoint protection is probably why the company has had a 98% customer retention rate for years.

As I mentioned earlier, CrowdStrike impresses with both the growth in new users and the company’s ability to encourage existing customers to spend more. In five years, the company’s subscriber base grew from 450 to 16,325. At the same time, the percentage of existing customers who purchased four or more cloud modules increased from 9% to 69%. Unsurprisingly, organic revenue growth from existing customers has been at least 20% year-over-year for 16 consecutive quarters.

As an icing on the cake, CrowdStrike’s adjusted gross margin is already at 79%, although the company is still in the early stages of growth. CrowdStrike is a clear buy even as the Nasdaq slides into the bear market.

The article 3 Growth Stocks to Buy During a Biden Bear Market first appeared in The Motley Fool Germany.

Read more

This article represents the author’s opinion, which may differ from the “official” recommendation position of a premium Motley Fool advisory service. Questioning an investment thesis, even one of your own, helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
This article was written by Sean Williams and published on Fool.com on 03/13/2022. It has been translated so that our German readers can join the discussion. Sean Williams owns Novavax. The Motley Fool owns stock and recommends CrowdStrike Holdings, Nio, and Tesla.

Motley Fool Germany 2022

Source link

- Advertisement -

New Articles