In case you’ve forgotten, stocks can go down just as easily as they can rise. Since the year began, Wall Street and investors have contended with the steepest corrections in both the tech-heavy Nasdaq Composite and broad-based S&P 500 since 2020.
Although the heightened volatility associated with crashes and corrections can be unnerving at times, every notable move lower in the stock market throughout history has represented a buying opportunity for patient investors.
Best of all, you don’t need a mountain of cash to take advantage of these opportunities as the market corrects lower. If you have $3,000 ready to invest, which won’t be needed to pay bills or cover emergencies, this is more than enough to buy into the following five unstoppable stocks.
The first unstoppable stock investors can confidently buy as the market heads lower is Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), the parent company of internet search engine Google and streaming platform YouTube.
Alphabet is arguably best known for its internet search dominance. In December, it controlled nearly 92% of global search engine market share, and has consistently held between 91% and 93% share of internet search going back two years, according to data from GlobalStats. This complete dominance makes it the go-to for advertisers looking to get their message in front of targeted users. In turn, it gives Google (and therefore, Alphabet) exceptional ad pricing power.
But Alphabet’s future relies on more than just being the internet search kingpin. The company’s ancillary segments, like YouTube and cloud infrastructure service division Google Cloud, provide faster growth than internet search advertising, as well as juicier margin potential. YouTube and Cloud grew year-over-year sales by 43% and 45%, respectively, in the September-ended quarter, and they’ve consistently generated revenue growth of between 40% and 50% over the past two years. Cloud is expected to play a particularly important role in beefing up Alphabet’s operating cash flow by mid-decade.
Even though Alphabet hasn’t retraced as much as other growth stocks, it’s already inexpensive at 23 times Wall Street’s consensus earnings for 2022.
Planet 13 Holdings
Another unstoppable stock with the ability to show investors the green is weed company Planet 13 Holdings (OTC: PLNH.F).
I know what you’re probably thinking, and it’s true: Marijuana stocks have been a buzzkill over the past year. The expectation was for the Democrat-led Congress to reform cannabis laws at the federal level, which hasn’t happened. Thankfully, multi-state operators like Planet 13 don’t require federal legalization to thrive.
What makes this company so unique is its focus on the customer experience. It only has two operating dispensaries, but both are hard to miss. There’s the 112,000-square-foot flagship SuperStore just west of the Las Vegas Strip in Nevada, and the more recently opened Orange County SuperStore in Santa Ana, California, which spans 55,000 square feet. These stores provide unparalleled selection and plenty of cannabis-related nostalgia.
Planet 13 is also having success promoting its proprietary brands. For example, sales of Trendi Vapes more than doubled from the prior-year period in the third quarter, with Trendi accounting for 5% of Nevada’s total vape sales.
With Planet 13 set to expand to new touristy markets, and the company making a push toward recurring profitability, it’s a logical buy in a swooning market.
Although investors’ emotions can whipsaw equity valuations in the short term, it’s a company’s operating performance that dictates how its shares perform over longer stretches. In this respect, Broadcom has been firing on all cylinders, with a majority of the company’s production booked well in advance.
One of the biggest growth drivers for Broadcom is the ongoing rollout of 5G wireless infrastructure. It’s been a decade since wireless download speeds were significantly improved. This is expected to result in a multiyear upgrade cycle for wireless devices. Most of Broadcom’s revenue is derived from next-generation wireless chips and accessories found in smartphones.
But like Alphabet, Broadcom is counting on ancillary industries to grow even faster than its core segment. As an example, Broadcom should benefit throughout the decade as demand for access and connectivity chips grows in data centers. We were already seeing businesses steadily shift their data into the cloud prior to the emergence of the coronavirus. What the pandemic has done is kick this trend into high gear, which is good news for Broadcom.
Sporting a forward-year price-to-earnings ratio below 15, and having grown its quarterly dividend by more than 5,700% in 11 years, Broadcom is a no-brainer buy.
Wheaton Precious Metals
It’s no secret that when investors are more fearful, they often turn to precious metals like gold as a safe haven to park their money. It just so happens that we’re also dealing with a historically low interest rate environment and rapidly rising inflation at the same time. That’s a solid recipe for physical gold to outperform, and for silver to benefit from a growing U.S. and global economy.
What makes Wheaton Precious Metals such an intriguing buy is the 26 streaming deals the company has set up for everything from gold and silver to copper and cobalt. In exchange for providing upfront capital to develop or expand a mine, Wheaton receives most or all of a specified metal’s production at well below cost. In the third quarter, its cash costs per ounce for gold and silver were $464 and $5.06, respectively. This worked out to a cash operating margin of $1,331/oz. for gold and $18.74/oz for silver. Because the company doesn’t handle day-to-day mining operations, its profit margin is among the highest in the industry.
To build on this point, Wheaton’s more than two dozen streaming deals ensure that no one company can upend its performance. This makes it one of the most-hedged precious metal companies in any economic environment.
A fifth unstoppable stock that’d be perfect to buy as the market corrects lower is companion animal health insurance provider Trupanion (NASDAQ: TRUP).
According to data from the American Pet Products Association, 70% of U.S. households own a pet, up from 56% in 1988. What’s more, an estimated $109.6 billion was spent on companion animals in the U.S. last year, and it’s been more than a quarter of a century since year-over-year spending on pets declined. It doesn’t matter how nasty the recession is — pet owners are always willing to spend on their furry, gilled, scaled, and feathered family members.
The interesting thing about Trupanion is that it’s just scratching the surface with regard to its opportunity. Only around 1% of U.S. companion animals are covered by health insurance. That compares to about 25% in the U.K. If the U.S. were to reach the same penetration rate as the U.K., Trupanion would be staring down a $34 billion addressable market.
Even though companion animal health insurance is a competitive space, Trupanion has clear-cut advantages. It’s been forging relationships with veterinarians and staff at the clinic level for more than two decades. It also provides point-of-sale software to clinics that can handle payment at the time of service.
Trupanion is an industry leader that can sustainably grow sales by 20% or more for the foreseeable future.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sean Williams has no position in any of the stocks mentioned. The Motley Fool owns and recommends Alphabet (A shares), Alphabet (C shares), Planet 13 Holdings Inc., and Trupanion. The Motley Fool recommends Broadcom Ltd. 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.