It's totally cool if you're saving some money for the next big market correction. Stocks are volatile these days, and there seem to be plenty of opportunities to buy into stocks you like on the way up or the way down. However, what if you didn't have to wait until the next downturn? What if you focused on stocks that have shown a knack to not only survive, but in some cases, thrive through the raging Wall Street calamity?
Netflix (NFLX -0.63%), Zoom Video (ZM 1.57%), and DocuSign (DOCU -0.26%) are three stocks with business models made to outlast market downturns, COVID-19 spikes, and recessionary stretches. Let's go into why you may not have to wait for a rainy day to put your $3,000 to work on winning investments.
Image source: Getty Images.
Netflix
There's merit to having more than 190 million paying customers worldwide -- as Netflix expects to have scored by the end of June -- but the real story here is how Netflix has bucked the market during its darkest hours. You may not have been a stock investor in 2008, but it was a dreadful year for equities. The subprime lending crisis slammed even the market's safest stocks, sending the S&P 500 38% lower for the year.
Netflix bucked the malaise, coming through with a 12% gain in 2008. It makes sense. Even in an economic funk, folks were retreating to the creature comforts of entertainment at home. Netflix relied almost entirely on DVD rentals by mail at the time. Its streaming platform launched in 2007 with minimal traction through the first couple of years.
The good times obviously didn't end there for Netflix. The stock has been better than a 100-bagger since the end of 2008. This week, the stock cracked $500 for the first time, a testament to its growing and engaging catalog of content that's proven to be immune to pandemics, recessions, and even a string of price hikes over the years.
Zoom Video
The big star of 2020 isn't a surprise. Zoom Video has nearly quadrupled this year, and its audience has grown even faster. Zoom's video-conferencing platform has become the industry standard for virtual classrooms and telecommuters, and peak meeting participation has popped more than 30-fold this year.
Zoom went from being an unknown brand to being the poster child of the pandemic this year, and investors are relishing the stock's 296% burst. Why is it the right time to buy into this year's hottest stock? Well, if the market does buckle in the near term, it will likely be another spike in COVID-19 cases.
We're already starting to see some school systems hesitant to return solely to in-classroom curriculums. Many leading companies have already told their employees that they can work from home until at least next year.
Zoom isn't going away. It has woven itself into our lives. The stock may seem overvalued by every possible metric but has cemented its status as a "flight to safety" stock this year.
DocuSign
We're moving away from wet signatures, and that's just fine by e-signature leader DocuSign. We were already shifting to electronic signatures before COVID-19, but social distancing norms have sped up the revolution. DocuSign stock has more than doubled in 2020 and it's going to keep growing.
Revenue rose 39% in this year's first quarter, accelerating slightly from the pace it established in 2018. A 59% rise in billings during the quarter suggests that we're just getting started with our warm embrace of e-signatures.
There will be a lot of nervous investors the next time the market buckles, but DocuSign's business will continue to be steady. There will still be contracts and documents to sign remotely, and DocuSign has earned its status as the document management giant of the future.
Netflix, Zoom, and DocuSign have been some of this year's best growth stocks, but they're not done. Their business models are built to withstand the next Wall Street crisis, and investors should keep buying this new breed of all-weather companies.
