The broader stock market in the U.S. has experienced a nice rally in the last month. That was a welcome development for investors after several indexes were trading in bear market territory (down 20% or more) near the end of the first half of 2022. If you missed out on stocks you wanted to buy during the previous stock market sell-off, fear not; chances are there will be others.
To prepare for the next market crash, it would be prudent to have a list of stocks you want to buy when their prices fall. Here are two unstoppable growth stocks to start your list.
Apple
Apple (AAPL -0.20%) is an iconic technology company with decades of experience creating innovative products that consumers eagerly buy. The iPod, iPhone, iPad, Apple Watch, and AirPods have each generated billions of revenue, with all but one of them still selling like hot cakes. Apple has layered one popular consumer product on top of another to create an integrated ecosystem.
Significantly, this increases the customer-value-proposition for each incremental Apple product a consumer buys. It also makes it harder to switch to another company if you own Apple products that you have customized. For instance, if you have an iPhone that you spent hours downloading apps, and making playlists, chances are you’re going to buy another iPhone when it’s time to upgrade.
AAPL Revenue (Annual) data by YCharts
That has helped Apple grow from $171 billion in sales in 2013 to $366 billion in 2021. Elevated customer demand for its products allows Apple to sell them at premium prices. Apple’s operating income has grown from $49 billion to $109 billion in that same time. The only reason to hesitate to buy Apple’s stock is that it’s not cheap on a price-to-earnings basis. If a stock market sell-off allows you to buy Apple at a lower price, it would be wise not to miss the chance.
Meta Platforms
Meta Platforms (META -1.19%) is home to some of the world’s most popular social media apps. Facebook, Instagram, Messenger, and WhatsApp have a total of 3.65 billion monthly active users. Meta’s apps are free to join. It makes money by showing advertisements, which makes its 3.65 billion monthly active users a critical asset. Meta has increased revenue at a compound annual rate of 41% in the last decade.
The impressive growth brought Meta to report revenue of $118 billion in 2021. Despite that massive sum, Meta has room to expand. Marketers spent $763 billion, excluding political ads, in 2021, an increase of 22.5% from the year before.
The business is lucrative, too. Most of the content on Meta’s platforms is created by users for free. That content attracts other users to view, comment, and otherwise engage with the platform. While you’re browsing, Meta will show you an advertisement or two, or three. That’s helped Meta average a pre-tax profit margin of 39% over the last decade.
AAPL PE Ratio data by YCharts
Interestingly, Meta’s growth has slowed in recent quarters as Apple has changed its operating system, making it more challenging for Meta to track its users’ activity. The stock is already trading at a bargain price because of headwinds to growth in the near term. A sell-off that further lowers its cost would make it a steal.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Parkev Tatevosian has positions in Apple. The Motley Fool has positions in and recommends Apple and Meta Platforms, Inc. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
Read More:2 Unstoppable Growth Stocks to Buy if There’s a Stock Market Sell-Off
2022-08-24 10:27:00
