The stock market offers investors few guarantees. But if there's been one constant throughout its history, it's that stock market corrections and crashes have always represented a buying opportunity for long-term investors.
Since 1950, the benchmark S&P 500 has undergone 38 corrections of at least 10%. Each and every one of these downside moves was eventually erased by a bull market rally, in many instances within a matter of weeks or months. Investors who choose to buy into unstoppable stocks -- i.e., companies that offer game-changing innovation and sustainable competitive advantages -- during these periods of heightened volatility are often handsomely rewarded.
Given the market's recent pullback, now looks like the perfect time for investors to put $3,000 to work in the following four unstoppable stocks.
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Intuitive Surgical
Robotic-assisted surgical device developer Intuitive Surgical (ISRG -1.69%) is a company that investors can buy with confidence. With the entire healthcare sector focused on precision medicine, demand for the company's da Vinci surgical systems should continue to grow over time.
What's interesting about Intuitive Surgical is just how dominant its surgical-assisted robotic platform actually is. Over the past two decades, the company has installed just shy of 6,000 of its da Vinci systems. That figure is more than all of Intuitive Surgical's competitors combined, by a longshot. Between the efficacy of the da Vinci systems, the hours spent training surgeons, and the price of these systems ($0.5 million to $2.5 million each), the company's customers tend to remain clients for a very long time.
As I've previously opined, the Intuitive Surgical operating model is also built to become more efficient over time. As more da Vinci systems are installed, the company will generate a greater percentage of its revenue from higher-margin segments (instruments and accessories sold with each procedure and the servicing of its surgical systems). This should allow earnings growth to handily outpace sales growth moving forward.
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GrowGeneration
Not surprisingly, cannabis is another arena where unstoppable growth stocks can be found. However, it's not just growers that investors should be paying attention to. Ancillary pot stock GrowGeneration (GRWG) has retraced significantly, despite staring down what could be another year of triple-digit sales growth.
GrowGeneration currently operates 50 stores across 11 states, and specializes in selling hydroponic equipment, as well as organic supplies to help growers improve their yield and protect their crops from pests. With cannabis booming in the U.S., GrowGen is expected to play a key role as an industry middleman.
Acquisitions remain a critical cog to GrowGeneration's success. The late February purchase of San Diego Hydroponics & Organics marked its fourth deal of 2021. Having completed well over a dozen deals since 2014, these buyouts help to expand the company's footprint quickly. GrowGen is aiming to end the year with 55 open retail locations.
But keep in mind that existing locations are rocking, too. Though its 140% sales growth in 2020 was aided by acquisitions, same-store sales growth was a blazing 63%. In short, GrowGen checks all the necessary boxes for long-term investors.
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Alphabet
As a general rule, the FAANG stocks are unstoppable industry leaders. That's what makes Alphabet (GOOGL -1.23%) (GOOG -1.10%) such a rock-solid stock to buy on any notable weakness.
The Alphabet story revolves around the dominance of the Google internet search platform. For well over a year, Google has accounted for between 91% and 93% of global internet search, according to GlobalStats. With such an overwhelming share of the internet search market, it's no surprise that advertisers will pay a steep price for targeted placement.
Furthermore, Alphabet's ad-driven operating model benefits from a numbers game that's heavily in its favor. It's no secret that businesses up their ad spending when the economy is expanding and pull back on their expenses when recessions arise. The thing is, periods of recession are usually measured in months, whereas periods of economic expansion last years, or even a decade. What advertising lumps Google does contend with are often short-lived.
Investors would be wise not to overlook Alphabet's ancillary operations, either. YouTube is now one of the three-most visited social sites on the planet, while cloud infrastructure service providers Google Cloud is the company's fastest-growing segment. Cloud is particularly intriguing given its considerably higher margins.
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Etsy
Lastly, investors should strongly consider putting their money to work into online marketplace Etsy (ETSY -0.86%), which has truly emerged as a star during the coronavirus pandemic.
Etsy isn't like your traditional online retailer. What's allowed it to stand out is the close-knit relationship it's built with small businesses. This is a platform that's built for close/personal engagement, and it led to a lot of repeat business for the merchants on its platform in 2020. Including the boost it received from face mask orders, Etsy's total sales jumped 129% last year.
What's noteworthy about this growth is that habitual buyers -- defined a buyers with six or more purchase days and over $200 in aggregate spend over 12 months -- spent 157% more on the platform in Q4 2020 than they did in the year-ago period. Since merchant ad revenue is what makes Etsy tick, its ability to retain these habitual buyers is key to its success. It also added 13 million new buyers last quarter, to go along with 7 million reactivations.
The company is also reinvesting heavily in its seller marketplace to keep users engaged (e.g., the introduction of listing videos), give merchants the tools they need to be successful, and to ultimately improve the company's operating margins. We've likely seen just a glimpse of what Etsy is capable of becoming.
