Investors have enjoyed a historic bounce-back rally since the March 2020 bear-market low. But if history tells us anything, it's that rebounds from a bear-market bottom are always met with some degree of resistance. Over the past couple of weeks, growth stocks have begun to see that resistance manifest in some nominally steep declines.
Although the idea of stock market crashes and corrections is worrisome to many investors, declines are a normal and healthy part of the long-term investing process. What's more, every sizable crash or correction in history has proved to be a buying opportunity for patient investors.
If you have $10,000, which won't be needed to pay bills or cover emergencies, you have more than enough capital to invest in the some of the market's best stocks at currently reduced prices.
It could be argued that none of the FAANG stocks is a better value right now than social media kingpin Facebook (META -3.84%). It's not often you'll find a stock with a 20% or greater sustainable growth rate that has a forward price-to-earnings ratio that's pretty much on par with the S&P 500.
The Facebook story is about social media dominance. The company ended March with 2.85 billion people visiting its namesake site each month, along with 600 million other unique visitors heading to Instagram or WhatsApp, which Facebook also owns. That's 3.45 billion monthly active users, or 44% of the world's population. With numbers like these, it's no wonder Facebook's ad-pricing power is through the roof.
Also, don't overlook that Facebook isn't even monetizing all of its key puzzle pieces, as of yet. The bulk of its revenue comes from ad placement on its namesake site and Instagram. Even though WhatsApp and Facebook Messenger are two of the six most-visited social destinations in the world, Facebook has yet to meaningfully monetize either. This is why Facebook's double-digit growth rate is sustainable for many years to come.
Green Thumb Industries
Marijuana stocks -- specifically those focused on the lucrative U.S. market -- have a very good shot at delivering some serious green to long-term investors. With a few top-tier multistate operators separating themselves from the pack, now could be the perfect time to put $10,000 to work in Green Thumb Industries (GTBIF 0.18%).
Green Thumb has 56 retail locations and enough licenses in its back pocket to have as many as 97 operating dispensaries covering a dozen states. What's been noteworthy about its expansion is the states it's chosen to operate in. Green Thumb's methodical approach has it operating in markets with greater than $1 billion in annual sales potential, or markets where retail license issuance will be limited. In the latter instance, Green Thumb will face reduced competition and should be able to effectively build up its brands.
The other key to the company's success is its heavy reliance on derivatives. Alternative consumption options, such as vapes, edibles, oils, and infused beverages, make up a majority of Green Thumb's sales. These items bear higher price points and much juicier margins than dried flower.
With comparable-store sales for the company up 35% in the first quarter alone, Green Thumb should remain on the leading edge of the green wave in the United States.
Typically, utility stocks are slow-growing, boring business models that become popular investments when market volatility picks up. But NextEra isn't like traditional utilities. It's been aggressively investing in green energy solutions for years and is the leading provider of solar and wind power capacity in the United States. The vast majority of the $50 billion to $55 billion in planned infrastructure spending between 2020 and 2022 is for clean-energy projects.
Although these projects are pricey, historically low lending rates have made them more affordable. Plus, leaning on solar and wind power has significantly reduced the company's electric generation costs. As a result, NextEra's compound annual earnings growth rate is in the high single digits, as opposed to the low single digits for most utility stocks.
It doesn't hurt that electricity is a basic-need service, either. This means NextEra's cash flow tends to be highly predictable from one year to the next.
Pharmaceutical stocks are almost always a great way to put $10,000 to work in the stock market. Since we don't get to choose when we get sick or what ailment(s) we develop, healthcare companies are smart defensive plays that should see consistent demand for drugs and medical devices. That's why Big Pharma AstraZeneca (AZN 1.01%) is one of the best stocks to buy right now.
Following a two-decade stretch where AstraZeneca struggled with patent cliffs and competition, the company is now firing on all cylinders. From an organic perspective, the company's oncology portfolio has been a superstar. All three of its cancer blockbusters -- Tagrisso, Imfinzi, and Lynparza -- have been growing by a double-digit percentage. Diabetes drug Farxiga also deserves a mention for its exceptionally fast growth rate.
Beyond oncology, AstraZeneca should benefit immensely from its pending acquisition of Alexion Pharmaceuticals (ALXN). Alexion is a biotech stock focused on ultra-rare diseases. The therapies it's developed often have few or no competitors, and insurers rarely push back on its high list prices.
Best of all, Alexion developed a replacement for its top-selling drug, Soliris, known as Ultomiris. Given far less frequently than Soliris, Ultomiris should protect Alexion's cash flow for at least a decade to come.
Finally, cybersecurity stocks would be a really smart place to put $10,000 to work right now. For businesses big and small, it's become a basic-need service. This is why CrowdStrike Holdings (CRWD -2.68%) should be on investors' buy lists.
The company's cloud-native Falcon security platform is the core reason it stands out from the pack. Falcon oversees about 5 trillion events each week, according to CrowdStrike, and it leans on artificial intelligence to grow more efficient at spotting and responding to potential threats over time. Since it's built in the cloud, Falcon can be a more effective and cheaper solution than on-premises security options.
A quick look at the company's operating performance shows that businesses are clinging to the services provided. It ended 2020 with a 98% customer retention rate, and close to two-thirds of its customers had purchased at least four cloud-module subscriptions. That's up from only 9% less than four years ago. These add-on subscriptions are precisely why CrowdStrike has already hit its long-term gross margin subscription target so early in its growth process.
Expect CrowdStrike to double its sales every two or three years over the next decade.