Warren Buffett once said: "Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble." Many investors don't realize it, but it's raining gold right now.
The stock market sell-off caused by worries about the coronavirus outbreak (and, more recently, plunging oil prices) has made a lot of really good stocks cheaper than they've been in quite a while. Long-term investors with available cash should be getting their buckets ready to put out. Here are three stocks where you could invest $10,000 right now and likely reap significant returns over the long run.
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals (NASDAQ:VRTX) haven't fallen as much as most other stocks during the coronavirus correction. That makes sense. Biotech stocks shouldn't be negatively affected by COVID-19, generally speaking. The companies' drugs will still be needed. Their clinical studies of drug candidates will still move forward.
You can add an exclamation point to those statements when it comes to Vertex. The biotech dominates the worldwide cystic fibrosis (CF) market. Over the last few months, it's picked up important reimbursement deals in Europe and elsewhere that should boost sales for several of its CF drugs. Vertex already won U.S. approval for Trikafta, its newest CF drug on the market, and awaits approval in Europe. The drug should expand the addressable patient population for its CF therapies by more than 50%.
Vertex's pipeline is focused on several other rare genetic diseases. It's partnering with CRISPR Therapeutics to test gene-editing therapies for treating beta-thalassemia and sickle cell disease. It's evaluating VX-814 in a phase 2 clinical study targeting alpha-1 antitrypsin deficiency. Vertex also has preclinical and early stage clinical programs targeting other rare genetic diseases.
But the biotech doesn't have its eyes only on rare diseases. Vertex is developing drugs that manage pain. Thanks to its acquisition of Semma Therapeutics last year, it's also now on a path to advance an experimental drug to clinical testing that could potentially cure type 1 diabetes.
2. The Trade Desk
The traditional way of buying advertising is for agencies to negotiate over a period of time with media companies. The Trade Desk (NASDAQ:TTD) operates a software platform that allows advertisers to buy digital ads immediately and cost-effectively through what's called programmatic ad buying.
Shares of The Trade Desk have dropped more than 25% from the highs set earlier this year. Have the business prospects for the company dwindled because of the coronavirus epidemic? No.
It's possible that some companies could be impacted by COVID-19 and cut back on their advertising budgets. However, it's also likely that more people will stay home, watch streaming TV, and browse the internet more instead of getting out and exposing themselves to infection by the novel coronavirus.
The Trade Desk beat Wall Street estimates in its Q4 results, delivering year-over-year revenue growth of 35% and adjusted earnings growth of 37%. The company also provided an optimistic outlook for 2020 despite its management being fully aware of the COVID-19 threat. With the programmatic ad market still only in its early stages and The Trade Desk standing atop the industry, the current market correction presents a tremendous buying opportunity.
3. Enterprise Products Partners
Enterprise Products Partners (NYSE:EPD) stock has plunged nearly 40% since early January. The entire oil and gas industry has been hit by a double-whammy. The coronavirus outbreak is causing people to travel less, reducing demand for oil. More importantly, an oil price war triggered by Russia is hammering North American oil and gas companies especially hard.
I don't expect that Enterprise Products Partners stock will recover until oil prices rebound somewhat. But I think that's going to happen sooner or later. Russia (and Saudi Arabia) won't be able to flood the market with cheap oil indefinitely.
Keep in mind that Enterprise Products Partners' natural gas pipelines, storage, transportation, and processing businesses make most of their money from fees and not commodity-based pricing. That will help the company move past the current challenges. It's also beneficial that Enterprise Products Partners ranks as one of the bellwethers in the midstream market and has a solid credit profile.
Buying shares of Enterprise Products Partners right now might seem a little scary, but there's a nice bonus -- the company's dividend. Thanks to the shellacking its stock has taken, Enterprise Products Partners' dividend yield stands at close to 9.8%.