The markets are doing well in November, with the S&P 500 soaring more than 8% over the first half of this month. However, not all stocks are rising, and there are even some attractive growth stocks that have been struggling of late. Investors may want to consider buying them today while their share prices are trading lower.
Seagen (NASDAQ:SGEN), Twitter (NYSE:TWTR), and Beyond Meat (NASDAQ:BYND) are all down from where they were four weeks ago, and with a lot of growth still left in each's tank, now could be an opportune time to scoop up a few shares. Here's a look at why these stocks have been struggling recently, and why they're still solid buys today.
In mid-October, things were going well for Seagen -- its share price trading at a 52-week high of more than $210. But in recent weeks Seagen's stock has fallen, and today it hovers at around $170 -- a decline of close to 20% since hitting a peak last month. Things started to go over a cliff in late October when the markets as a whole faced the reality of rising COVID-19 cases in the U.S. and abroad. When Seagen released its third-quarter results on Oct. 29 for the period ending Sept. 30, even though its net product sales looked strong, coming in at $267.5 million and rising 60% year over year, that wasn't enough to offset the bearish activity in the markets, and the stock continued to fall.
The Washington-based company reported total revenue of $1.1 billion for the quarter, which was five times the $213.3 million that Seagen reported in the same period last year. The jump was largely due to collaboration revenue of $758.3 million, which totaled just $18.4 million in the prior-year period. The collaboration is primarily with Merck (NYSE:MRK), which invested $1 billion in Seagen earlier this year and paid the company $725 million upfront in license fees that relate to collaborations for Tukysa and Ladiratuzumab vedotin, two drugs that treat breast cancer. Seagen is projecting that for the full year, its revenue will come in around the $2 billion mark. That's more than double the $917 million in sales that Seagen reported in 2019.
The cancer-fighting company is a great long-term investment, and working with healthcare giant Merck should help open up even more opportunities for Seagen down the road.
Social media company Twitter was in great shape before it released its third-quarter earnings in late October. Like Seagen, it was trading near its 52-week high of more than $50 per share. However, the stock crashed after the company reported its results on Oct. 29 for the period ending Sept. 30. Although the company's sales of $936 million were better than analyst expectations of $777 million, that wasn't enough to get investors excited. Twitter even beat on earnings, reporting adjusted per share profits of $0.19 versus the $0.06 that Wall Street was expecting. The big problem was that its monetizable daily active users (mDAUs), a key metric for the tech company, came in at just 187 million, while analysts were hoping for a much higher count of 195 million.
As a result, shares of Twitter ended up tumbling, and today they are trading around $42 -- a drop of more than 15% from when they were in the $50 range. However, the mDAU number is still up 29% year over year, and outside of the second quarter when it rose 34%, the growth rate has been consistently on the rise since the company first switched to the metric in the last quarter of 2018, preferring it to the monthly active users measurement.
A dip in mDAU shouldn't be enough to turn investors bearish on Twitter's long-term potential. Its platform is still a popular way for people to stay connected whether they're at home under COVID-19 restrictions or out and about. And as coronavirus cases continue to climb, there could be more people using the service in future quarters.
3. Beyond Meat
Beyond Meat is another stock that's coming off a recent 52-week high. From a share price as high as $197 in early October, the stock has crashed more than 35% since then, down to around $125 today. The company fell 17% on Tuesday after reporting underwhelming results in its latest earnings report, for the third quarter ending Sept. 26. Beyond Meat released the results on Nov. 9 and its sales of $94.4 million missed analyst projections of $132.8 million by a mile. And its per-share loss of $0.28 was also nowhere near expected $0.05 per share adjusted profit.
The company blamed the results on COVID-19, with President and CEO Ethan Brown saying that while people were buying up supplies and "freezer loading" earlier on in the pandemic, the demand was not as great this past quarter.
But general demand for plant-based meat still appears strong. Research firm Packaged Facts conducted an online survey in August, and reported that just under a quarter (23%) of U.S. consumers eat plant-based meat products. Even more encouraging: Those who aren't eating the products today are open to doing so. As many as 37% of non-consumers indicated that they'd be willing to try the products. Another company, Grand View Research, projects that the global market for plant-based meat will grow to $13.8 billion in 2027, rising at a compounded annual growth rate (CAGR) of 19.4% until then.
With lots of growth left in the plant-based meat market, Beyond Meat could be an appealing long-term buy, especially at a reduced price.
Which stock is the best buy today?
These three stocks aren't done growing and all could potentially be great buys for the long term. Here's how they're doing today:
Even with their recent declines, all three stocks are still trouncing the S&P 500 and its 10% returns in 2020. Beyond Meat is leading the way with 67% returns so far.
However, the stock that looks to be the most promising today is Twitter. Its year-to-date returns have been more modest than the other two stocks on this list, and the communication medium is still growing in popularity. There's significant potential in the plant-based meat market but there are also many competitors that Beyond will have to worry about, including the Impossible Burger, Sweet Earth, and others. Seagen is coming off a great quarter, but it's also been in the red in seven of the last nine periods, as has Beyond Meat. Twitter, meanwhile, has recorded a profit in seven of its last nine quarterly results, and is probably the safer and more stable buy today.