It's a remarkable time to be an investor. Over the past year, the market has not only recovered its losses from the coronavirus crash, but marked multiple days of new thrilling highs.
The stock market has shown increased volatility in recent weeks. But for the time being, optimism about the U.S. economy's ongoing recovery is outweighing investor concern about the rising rate of inflation. Even so, it's more vital now than ever that investors focus their portfolios on resilient stocks that can continue providing growth and generating consistent returns in a variety of market scenarios.
Are you ready to fortify your portfolio in the month of April with some winning stock buys? Let's take a look at two red-hot stocks that fit the bill and can easily stimulate optimal portfolio growth for decades to come.
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1. Zoom
Zoom Video Communications (ZM -0.82%) has by far been one of the most popular stocks among investors since the pandemic began. Shares soared by about 700% between January and October of 2020, and have drawn back to a more reasonable price point in the months since. The stock is still trading about 167% higher than it was one year ago.
Although the pandemic has certainly boosted Zoom's balance sheet and accelerated share growth over the past year, the company continues to pose a compelling investment for the post-pandemic world. The company was a rock-solid growth stock before the pandemic. During the company's fiscal 2020 (ended Jan. 31, 2020), which was Zoom's first year as a publicly traded company, the tech giant reported 88% revenue growth.
When widespread lockdowns forced millions of individuals to do school, work, and even social activities in a remote setting, Zoom's platform became the go-to solution to bridge the gap and help people stay connected. In Zoom's fiscal 2021 (ended January of this year), the company capitalized on its established track record of platform growth. It reported revenues up 326% for the full year, while its net income surged nearly 3,000% from fiscal 2020.
Management is expecting Zoom's top-line growth in fiscal 2022 to return to closer to pre-pandemic levels. They project that the company will increase its revenues by roughly 42% for the full year. Some investors were disappointed by Zoom's fiscal 2022 revenue forecast, but top-line growth in the mid-double-digit percentages makes perfect sense given the progressive shift back to the new normal that is currently underway in many areas of the world.
As society adjusts post-pandemic, the way people use Zoom will shift in kind. But Zoom's platform and services will also continue to fill an essential need in a world that is increasingly embracing the digital age we live in.
While many employees are returning to in-person office work, a growing number of companies are transitioning to part-or full-time remote work arrangements. The pandemic has also changed the way that many companies approach business travel, in that a well-timed video conference can often replace the expense and time associated with frequent flying for business meetings.
All of this boils down to form a picture of continued, sustainable growth for Zoom and its shareholders. And the stock's recent price decline provides an excellent opportunity for shrewd investors to buy shares of the tech company at a far more reasonable valuation than a few months ago.
2. Intuitive Surgical
Medical robotics maker Intuitive Surgical (ISRG -1.69%) has been the bearer of short-term headwinds from the pandemic, but its long-term outlook as a viable investment remains untarnished. The company is known for its da Vinci Surgical Systems, a series of robotics products used around the world for a host of minimally invasive surgeries ranging from cardiac to urology procedures.
Last year, an overall decline in orders for its systems, as well as a general drop in the number of surgical procedures performed worldwide, had a noticeable effect on Intuitive Surgical's balance sheet. As a result, the company's 2020 revenues declined 3%. By contrast, Intuitive Surgical had reported 20% revenue growth in 2019.
The good news is that clear signs of recovery were apparent in the final quarter of 2020. During this period, the company reported a 6% increase in procedures using its da Vinci systems compared to the year-ago period, and its base of installed surgical systems surged 7% year over year. In total, its fourth-quarter revenues grew 4% year over year while its net income increased by about 2% from the year-ago quarter.
The company also has plenty of cash on hand to see it through any near-term bumps in the road as the world slowly ekes back to normalcy and surgical procedures pick up again. Intuitive Surgical closed 2020 with roughly $7 billion in cash, cash equivalents, and investments on its balance sheet, as opposed to a lesser $1.4 billion on total liabilities. The company doesn't pay a dividend, so it has far fewer constraints on its cash position than other healthcare stocks that do.
Despite the immediate effect that the pandemic has had on Intuitive Surgical's balance sheet, the stock has continued to surge and make shareholders wealthier throughout this period. Over the past year alone, shares of Intuitive Surgical have soared 57% higher.
It's also important to remember that Intuitive Surgical is the preeminent player in the rapidly expanding field of robot-assisted surgeries, a market that Fortune Business Insights estimates will reach a global valuation of more than $13 billion by the close of the year 2025. As of 2018, a study by Pharma Intelligence revealed that Intuitive Surgical had more than an 80% share in the global robotic-assisted surgery market. Intuitive Surgical is poised to reap the profits of the rapid expansion of the highly lucrative industry in which it operates, and investors who buy in now could see compelling portfolio gains from this large-cap healthcare stock for many years to come.
