The Nasdaq Bear Market: 5 Surprising Growth Stocks You’ll Regret Not Buying When It Dips

Since the beginning of the 1950’s, widespread Standard & Poor’s 500 It holds 39 separate double-digit drops. This works out to one every 1.85 years – and this is definitely one of those years. During the first six months of 2022, the S&P 500 posted its worst return in more than half a century.

However, things were worse for the tech-focused NASDAQ Composite (^ IXIC 0.01%)which was largely responsible for lifting the broader market to record highs in 2021. On a peak-to-bottom basis, the Nasdaq is down as much as 38% since hitting its highest level a year ago.

A snarling bear placed in front of a bearish stock chart.

Image source: Getty Images.

But herein lies the opportunity for investors. Despite stock market corrections, and even bear markets, is a normal part of investing, as is the fact that major indices claw back their losses (and then some) over the long term. In the end, the Nasdaq bear market will be nothing more than a memory.

It’s a particularly good time for vulture investors to pounce on innovation growth stocks Which was beaten by weak market sentiment. Here are five amazing growth stocks you’ll regret not buying when the Nasdaq bear market plummeted.

the alphabet

The first sure stock you’ll regret not buying is the Nasdaq the alphabet (GOOGL -0.95%) (The Google -0.71%), the parent company of the YouTube streaming platform and the internet search engine Google. Even as advertising revenues have taken a hit as the likelihood of a US recession grows, Alphabet’s competitive advantages stand out as a beacon for vulture investors.

The key to Alphabet has always been Absolute dominance in Internet search. Based on data provided by GlobalStats, Google has captured 91% to 93% of global searches for over two years. This virtual monopoly results in significant advertising pricing power and a mountain of operating cash flow that the company can use to reinvest in other high-growth initiatives.

One such initiative is YouTube. One of the best acquisitions in history – YouTube was acquired by Google in 2006 for $1.65 billion – YouTube is the second most visited social media platform on the planet. With Alphabet looking at ways to increase the monetization of the YouTube Short, the YouTube ad revenue needle should point significantly higher in the long term.

There is also Google Cloud, which is a The world’s third leading cloud infrastructure services provider. Cloud spending is still, arguably, in its infancy, and Alphabet should be able to sustain a near 40% annual growth rate as companies move data online to the cloud.

Historically speaking, Alphabet has never been cheaper.

barking

The second notable growth stock to be bought during a Nasdaq bear market decline is a dog-focused products and services company barking (Bark -3.28%). Although Park continued to lose money, the company’s innovation, along with industry advantages, would allow small business stock to shine.

The first factor working in Park’s favor is that American pet expenditures are practically recession-proof. It’s been more than a quarter of a century since annual pet spending in the United States declined. Whether it’s pet food, veterinary care, or other services, such as pet insurance, owners are willing to open their wallets a little wider each year to ensure the health and happiness of their furry, gill, feathered, or tiered family members. ).

Bark’s not-so-subtle secret that should allow it to outperform most retail pet stocks is that its operating model is Primarily driven by direct-to-consumer sales. Although the timing of retail orders can fluctuate quite a bit (as it did during the last quarter), merchandise sales that occur in brick-and-mortar stores typically make up only 10% to 15% of total revenue. This means that the bulk of sales come from low-cost subscription services designed to generate predictable cash flow and a gross margin of about 60%.

On the innovation front, it was Park Lots of incremental sales success Since Bark Bright was introduced to cater to dogs’ dental needs, and should see similar success ramping up from Bark Eats, which tailors dry food meals for select dog breeds. Those additional selling opportunities can really boost your gross margin.

A hacker wearing black gloves types on a backlit keyboard in a dimly lit room.

Image source: Getty Images.

Octa

The third amazing growth stock you will regret not picking up during a Nasdaq bear market crash is Cyber ​​security inventory Octa (OKTA 1.61%). Although Okta’s integration of Auth0 has run into a few speed bumps in the near term and resulted in larger quarterly losses, the future is getting brighter for this identity verification provider.

Similar to Bark, Okta relies on macro trends which are of great benefit to it. Just because Wall Street or the US economy is hitting a rough patch, it doesn’t mean that bots and hackers are taking a vacation from trying to access or steal sensitive information. As time goes on and companies move their data to the cloud, the burden of protecting that information increasingly falls on third parties like Okta.

as such I have indicated previouslyOkta’s cloud-native identity verification security platform is a big advantage. Okta’s reliance on AI allows its solutions to grow more efficiently in identifying and responding to potential threats over time. As cyber security has evolved into a core necessary service, double-digit sales growth should be the expectation for many years to come.

Ultimately, Okta will benefit from the Auth0 purchase as well. Despite higher integration costs in the near term, Auth0 provides a way for Octa to enter the European market. International expansion is a necessary step that will help Okta maintain a double-digit growth rate.

Green Thumb Industries

The Fourth Amazing Growth Stock You’ll Regret Not Buying Given the Nasdaq’s Drop Is Multi-State US Cannabis Operator (MSO) Green Thumb Industries (GTBIF -4.63%). Although federal cannabis reforms continue to unravel, legalizing marijuana at the state level provides more than enough incentives for MSOs like Green Thumb to succeed.

As of the end of September, Green Thumb had 77 operating dispensaries in 15 states. While some of these states are high-dollar markets, like California, Colorado, and Florida, what’s been particularly interesting about Green Thumb’s expansion is Push it into the limited licensing markets Such as Illinois, Ohio, Pennsylvania and Massachusetts. Countries where licensing is intentionally limited helps ensure that newcomers get a fair opportunity to establish their brands and build a following.

What really helped separate Green Thumb Industries from other MSOs is its mix of revenue and operating performance. In terms of the former, more than half of the company’s sales are generated from derivatives, such as vapes, eating, beverages, pre-rolled joints, dabs, and beauty products. Derived pot products are more expensive than dried hemp flower and, more importantly, have much better margins.

This leads to the other key point: the green bottom line for the thumb. While most US MSOs are still looking for their profitable first quarter, this company has posted nine consecutive quarterly earnings, based on Generally Accepted Accounting Principles (GAAP). No matter what happens on Capitol Hill, Green Thumb is only getting stronger.

sea ​​ltd

The Fifth Amazing Growth Stock You’ll Regret Not Buying With Your Fist During The Nasdaq Bear Market Is A Singapore-Based Conglomerate sea ​​ltd (SE -4.99%). Despite heavy losses in 2022 and likely in 2023, Sea is building a unique trio of business segments that can significantly increase stocks over the long term.

First up is Garena, the company’s digital entertainment segment backed by successful mobile games free fire. Although quarterly active users recovered in the June quarter to 619.3 million from 725.2 million in the year-ago period, the most important thing to note is that 9.1% of those 619.3 million users were paying to play. This is it Much higher than the pay-to-play ratio for the mobile gaming industry as a whole.

Secondly, the Sea’s relatively young digital financial services sector is growing by leaps and bounds. The number of quarterly active users jumped 53% to 52.7 million, as of the end of June 2022. With Sea operating in a number of emerging market/underbanked regions, providing access to digital wallets could be a sustainable high-growth opportunity.

Third, there is the Shopee e-commerce section. Although online retail sales are not known for supporting large margins, Shopee has been a remarkable growth segment in Sea. Based on the company’s second-quarter results, it generates $76 billion in annual gross merchandise value (GMV) transiting its platform. In all of 2018, Sea recognized just $10 billion in GMV. With adoption growing in Brazil and Southeast Asia, Shopee could be Sea’s ticket to a much higher valuation.

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