Whether you’re new to the stock market or have been investing for decades, the first nine months of 2022 were tough. pointer Standard & Poor’s 500 The index is down 17% this year.
The Nasdaq composite pointerwhich has bigger growth stocks than the S&P 500, fell an alarming 27% in 2022. During market crashes like this, stocks with outperforming core businesses can go down as easily as stocks with failed businesses.
I bought both growth stocks Over the past year, it decreased significantly. Instead of crying about it, I am really excited about the opportunity to lower the average price of entry into these positions. Here’s why.
1. SoFi Technologies
shares SoFi Technologies (Sophie 0.83%) It’s down about 78% since the company debuted on the stock market in June 2021. Early expectations may have been a bit high, but the company is doing a lot better than the stock chart suggests.
SoFi Technologies started about a decade ago with an innovative student loan refinancing program, and is now a full-service consumer bank that provides checking accounts, retirement accounts, car loans, mortgages and credit cards. Emerging loans became more profitable in January when SoFi secured a national banking charter from US regulators.
The bank’s charter allows SoFi to fund loans from a rapidly growing base of customers’ checking deposits and savings accounts. At the end of June, SoFi members were using 5.3 million financial services products. This was double what the company reported the previous year.
In addition to the fast-growing consumer banking sector, SoFi has a leading company financial technology platform called Galileo. Banks and other companies that want to set up customer accounts and payment software use the Galileo Application Programming Interface (API) more than any other interface. In fact, the number of accounts enabled by the tech platform SoFi rose 48% year over year to 117 million at the end of June.
Despite being in a high growth phase, SoFi is not burning money. In fact, management expects adjusted EBITDA to come in somewhere between 6% to 7% of total revenue this year.
Higher interest rates mean that SoFi must offer higher rates on consumer deposits. Fortunately, the rates you can charge on loans and mortgages have gone up even more. This means that the bank’s already good profit margin will likely improve in 2023 and beyond.
2. Shockwave Medical
Shock Wave Medical (SWAV 0.81%) Medical devices are rapidly becoming part of the standard game of treating calcified arteries. This company develops and manufactures the first and only intravascular lithotripsy devices. These are catheters that use sound pressure waves to break up calcium deposits.
Using sound waves to break up calcium deposits may seem a little tricky, but it’s no more insane than the standard technique, angioplasty. This is basically a balloon trying to break up the calcium deposits by tightening the arteries from the inside out.
Clinical studies comparing outcomes for patients treated with angioplasty versus lithotripsy significantly favor Shockwave devices. For example, in May of this year, results from the Disrupt trial showed that blood is more likely to continue flowing through an artery treated with the Shockwave device than with conventional angioplasty.
Shockwave currently records the majority of its sales in the US, but that may change soon. In May, the company received approvals to start selling its devices in China, where they can be used for the millions of procedures required each year.
Shockwave’s operating performance has been so positive that even rising interest rates and fears of a recession can’t hurt the stock. It has gained about 49% this year. The The latest big rise This came in response to second-quarter sales that doubled year-over-year to $121 million. There are no guarantees, but international expansion in China and beyond may allow it to maintain that pace for years to come.