IIn the words of Warren Buffett, “Whether we are talking about socks or inventory, I like to buy quality merchandise when it is marked down.” While price alone should never determine whether you buy a stock, Buffett’s sentiment is worth remembering for long-term investors.
When you buy and hold stocks for years, you will likely find that stocks fluctuate over time with the wider market. In today’s rather turbulent market, while many stocks are overvalued, a number of growth stocks with large underlying companies have fallen from pandemic highs. This creates an opportunity for savvy long-term investors to make good purchases on the cheap.
If you’re going on a bargain hunt this week, here are two stellar stocks to consider.
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Teladoc
The world’s largest telehealth provider became a household name at the start of the pandemic, as lockdowns and overwhelmed health systems forced patients to seek other ways to get the care they needed when they needed it. need.
Although the actions of Teladoc (NYSE: TDOC) have fallen about 30% in the past year as the hype surrounding home stocks has calmed down, its growth has remained stable. It’s also worth noting that healthcare stocks have appreciated by around 676% over the past five years, well above the 107% return offered by the S&P 500 in the same time window.
Teladoc’s penchant for rapid revenue growth did not start with the pandemic. For example, in 2019, the company reported that its revenue jumped 32% from the previous year. And that same year, the total number of visits made to the Teladoc platform increased by 57% compared to 2018.
In the most recent quarterly report, for the period ending June 30, the healthcare stock reported that its revenue grew 109% year-over-year. In addition, the total number of visits to its platform has jumped almost 30% compared to the quarter of last year. During the three-month period, Teladoc expanded its already considerable range of health services with the launch of myStrength Complete, which it describes as “an integrated mental health service that combines application-based tools and expertise. coaching with therapists and psychiatrists from Teladoc “.
The company ended the second quarter with approximately $ 784 million in cash and cash equivalents and approximately $ 276 million in debt due over the next year. In fact, it has been such an illustrious quarter of growth for Teladoc that management has again raised its annual targets, after doing so in the previous quarterly report. It now forecasts an 80% increase in turnover for the whole of 2021.
Teladoc shares may not be flying as high as they were a year ago. But his outlook as a leader in his industry (which is expected to reach a global valuation of nearly $ 500 billion by 2026) remains unchanged. Teladoc continues to add strong growth quarter after quarter to an already excellent track record. Long-term investors should consider buying now before stocks skyrocket again.
2. Fifth
My next stock is from an entirely different industry, but one that also has impressive long-term potential. Independent platform Fifth (NYSE: FVRR) captured the interest of investors last year because of its unique relevance in the age of working from home.
But as global economies began to recover, many investors turned to reopening stocks. Unsurprisingly, Fiverr shares have fallen more than 11% since the start of the year, although they are still around 55% higher than just 12 months ago.
With the stock on sale, is it a good time to buy? The answer is an unequivocal yes. Let’s start by looking at several relevant statistics. According to a recent study by Orbis Research, the global freelance platform market is on track to reach a valuation of over $ 9 billion by 2026. Fiverr’s platform and services also directly support the economy of freelancers. booming concerts, which should generate gross income. volume of over $ 455 billion worldwide by 2023 alone. Latest estimates show that a freelance writer lands a new contract on Fiverr every four seconds.
The company was launched in 2010 and went public in 2019. In that year, it saw robust revenue growth of 42%. In 2020, as the pandemic brought a wave of new activities to its platform, its revenues increased by 77% compared to the previous year.
In the first and second quarters of 2021, Fiverr saw revenue growth of 100% and 60%, respectively. Active buyers jumped 56% and 43% in those two quarters, respectively, while spend per buyer climbed 22% and 23%. Management anticipates that the company will be able to increase its annual turnover by 52% from 2020.
While Fiverr is not yet profitable, that is to be expected with a new, high growth company working hard to expand into a competitive market. The company spent $ 80 million on sales and marketing in the first half of 2021 alone, a significant change considering its revenue for the six-month period totaling $ 143.6 million. So far, Fiverr is reaping the rewards of its vast sales and marketing efforts in the form of increased revenue and users. It’s also worth noting that the company’s Adjusted EBITDA saw a massive improvement over the past quarter, up around 140% year-over-year.
Fiverr’s business is moving in the right direction, and it may not be long before investors take notice and stocks rebound as well. It seems now is a good time to take advantage of this discounted stock for the superior long-term growth potential it can offer a balanced portfolio.
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Rachel Warren has no position in the stocks mentioned. The Motley Fool owns shares and recommends Fiverr International and Teladoc Health. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.