Nasdaq Bear Market: 5 Incomparable Growth Stocks You’ll Regret Not Buying on the Dip

This year has been a good reminder that stocks don’t move in a straight line – even though 2021 made you believe they did. For example, the reference S&P500which is considered an overall measure of market health, posted its worst first-half performance in 52 years.

It’s been even harder work for those dependent on growth Nasdaq Compound (^IXIC 0.00%). The index widely credited with lifting the stock market out of the COVID-19 pandemic slump has lost up to 34% of its value after its November closing high. This placed the Nasdaq in the throes of a bear market.

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Although bear markets can be scary, history has shown time and time again that they are the perfect time to grow your money. Indeed, every notable decline in major indices, including the Nasdaq Composite, was eventually erased by a bull market.

This is a particularly good time to go bargain hunting in the growth stocks arena. Below are five incomparable growth stocks you’ll regret not buying during the Nasdaq bear market decline.

PayPal Credits

The first phenomenal growth stock you’ll blame yourself for not buying during the Nasdaq bear market decline is the fintech giant PayPal Credits (PYPL -1.65%). Although PayPal’s low-income customer decile has been hit by historically high inflation, digital payments offer a sustainable growth avenue.

One of the most impressive things about PayPal has been the persistent double-digit percentage growth, at constant exchange rates, in total payment volume (TPV) across its digital platforms. Even with US gross domestic product retracing in consecutive quarters, PayPal has maintained a double-digit TPV. Since booms last much longer than contractions and recessions, PayPal is perfectly positioned to thrive with the growing adoption of digital payments.

Speaking of engagement, active PayPal accounts tell a very encouraging story. At the end of 2020, the company’s average active account was making nearly 41 payments per year. Just 18 months later, the average active account has made nearly 49 trades in the past 12 month period. Since PayPal is primarily a fee-based platform, this steady growth in engagement signals higher gross profits on the horizon.

PayPal is about as cheap as it’s ever been as a publicly traded company, making it a crying buy for patient investors.

Fiver International

A second exceptional growth stock that long-term investors will regret not recovering during the Nasdaq bear market is the online services market. Fiver International (FVRR -0.99%). Despite near-term concerns about the slowing US economy negatively affecting demand for freelance work, Fiverr is uniquely positioned to take advantage of a structural shift in the home work environment in the wake of the coronavirus pandemic. COVID-19.

Differentiation is key to Fiverr’s success. While most online service marketplaces feature services on an hourly basis, Fiverr freelancers offer their services as a package. This provides greater price transparency for owners and businesses looking to employ a freelancer. Perhaps most importantly, this transparency has helped sustainably increase average spend per buyer.

Fiverr also stands out for its acceptance rate – the percentage of offers negotiated on its online service marketplace that it can keep. While most of its competitors have mid-teen engagement rates, Fiverr’s engagement rate was 29.8% in the June quarter. Having an acceptance rate that is double what its competitors are generating and seeing the average spend per buyer continue to climb is a punch that should prove very profitable for Fiverr and its investors.

Person in full suit looking closely at a microchip in his hands.

Image source: Getty Images.

Broadcom

The third unmatched growth stock just begging to be bought as the Nasdaq plunges into a bear market is the semiconductor solutions provider Broadcom (AVGO 1.67%). Even as supply chain constraints and weak short-term orders wreak havoc on the chip industry, Broadcom has clear advantages to help it weather the storm.

For starters, Broadcom derives most of its revenue from the development and sale of wireless chips and accessories found in next-generation smartphones. It’s been about a decade since telecom providers made sweeping upgrades to their wireless infrastructure. The 5G revolution, which brings faster download speeds to businesses and consumers, is expected to lead to a steady smartphone replacement cycle at least through the middle of the decade.

Broadcom’s ancillary operating segments also offer intrigue. The company’s solutions are increasingly found in next-generation vehicles, which are increasingly dependent on technology. But the most exciting growth opportunity may come from data centers, where Broadcom provides connectivity and access chips. With businesses accelerating the pace of moving data to the cloud following the pandemic, data center demand is expected to continue to increase.

The icing on the cake for Broadcom is that it ended last year with a record $14.9 billion backlog. This order book ensures transparency of the company’s cash flow in an uncertain economic environment.

Cresco Laboratories

A fourth spectacular growth stock you wish you had bought during the Nasdaq bear market decline is the cannabis company. Cresco Laboratories (CRLBF 3.25%). Although there has been clear hesitation on the part of Wall Street with the US federal government kicking marijuana reform, multi-state operators (MSOs) like Cresco can still thrive thanks to many state-level legalizations.

There are two aspects to Cresco Labs’ growth strategy that make it such an intriguing purchase. First, the company has really focused its retail expansion in limited license markets. Although it has a presence in a number of high-value cannabis markets, its entry into limited license markets – markets where the issuance of dispensary licenses is capped – should ensure it a fair chance to grow its brands. and build customer loyalty.

Cresco is also in the process of acquiring MSO Care British Columbiawhich will make the combined company one of the largest MSOs in the United States. When the deal closes, Cresco will have more than 130 operating dispensaries in 18 states.

The second unique factor of Cresco is its industry-leading wholesale operations. Although Wall Street tends to frown on the lower margins associated with wholesale cannabis, Cresco profits hugely from the volume. That’s because it’s licensed to distribute marijuana in California, the largest pot market by annual sales.

Microsoft

The fifth unmatched growth stock you’ll regret not buying during the Nasdaq bear market decline is the tech giant Microsoft (MSFT -1.67%). Even the growing likelihood of a US and/or global recession shouldn’t make long-term investors think twice about putting their money to work in “Ole Softy.”

One of the reasons Microsoft is making such a fantastic investment is that its legacy and innovation segments work hand in hand. For example, the company’s Windows operating system no longer has the same growth as it did 20 years ago. But given that Windows still accounts for around three-quarters of the global desktop operating system market share, it’s an absolute cash cow for the company. The cash generated by Windows allows Microsoft to make profitable acquisitions and reinvest in fast-growing initiatives.

Without a doubt, Microsoft’s most significant growth initiative is anything to do with cloud computing. Microsoft Azure is the world’s second largest spender on cloud services, in the quarter ended June, with sustained constant currency sales growth of nearly 50%. While cloud spending is still in its infancy, Microsoft’s annual operating cash flow is expected to top $100 billion sooner rather than later.

Finally, Microsoft is one of only two publicly traded companies with the coveted AAA credit rating from Standard & Poor’s (S&P), a division of S&P Global. Simply put, S&P is confident that Microsoft can insure and repay its debts.

This is a well-known stock with an incredibly high bottom and ever-increasing top.

About Troy McMiller

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