Whether you realize it or not, investors have witnessed history over the past 18 months. They've watched Wall Street navigate the quickest 30%-plus decline in the history of the benchmark S&P 500, as well as enjoy the most robust bounce back from a bear market bottom ever. Since hitting its trough on March 23, 2020, the S&P 500 has nearly doubled in value.
But despite this persistent climb, some of Wall Street's most game-changing stocks have backed considerably off of their 52-week highs. However, this isn't cause for panic. Rather, it's your opportunity to scoop up top-tier companies at a discount.
The following five game-changing stocks are all at least 35% below their 52-week highs and begging to be bought.
Image source: Getty Images.
Teladoc Health: 52% below 52-week high
One company on the leading edge of innovation in the healthcare space that's been more than cut in half is telehealth services giant Teladoc Health (TDOC 0.08%). Investors appear to be worried about near-term growth prospects as the U.S. economy reopens. Wall Street also hasn't been thrilled with Teladoc's wider-than-anticipated losses following its acquisition of applied health-signals company Livongo Health.
While there's no doubt we could witness some operating turbulence in 2021, Teladoc's platform is the unquestioned wave of the future in personalized care. Virtual visits are more convenient for patients, and they can help physicians keep better tabs on chronically ill patients. This should presumably result in improved patient outcomes and less money out of the pockets of health insurers. Not surprisingly, Teladoc's annual sales grew by an average of 74% in the six years leading up to the pandemic.
Teladoc's integration of Livongo Health also solidifies its position as a leading healthcare innovator. Livongo collects copious amounts of data on patients with chronic illnesses and leans on artificial intelligence to send tips to its members to help them lead healthier lives.
As of the end of June, Livongo had 715,000 enrolled members, with a current focus on patients with diabetes. With plans to expand its service to people with weight-management issues and hypertension, Livongo's potential member pool covers a large percentage of adults in this country.
Image source: Planet 13.
Planet 13 Holdings: 36% below 52-week high
You might be scratching your head and wondering how a marijuana stock is in any way "game changing." The answer can be found in the way Planet 13 Holdings (PLNH.F 4.03%) operates its business.
Planet 13, which is off 36% from its 52-week high, hasn't followed in the footsteps of other U.S. multistate operators. Instead of planting its proverbial flag in as many legalized states as possible, it has just two operating dispensaries.
However, these retail locations (known as SuperStores) are as devoted to enhancing a customer's experience as they are to selling cannabis products. The Las Vegas SuperStore spans 112,000 square feet and offers a restaurant, events stage, and consumer-facing processing center. Meanwhile, the recently opened Orange County SuperStore will span 55,000 square feet when fully complete and feature 16,500 square feet of selling space. There's isn't a pot stock in the U.S. that offers a more-encompassing cannabis experience than Planet 13.
This is also a company that's ready to make the push to recurring profitability. The pandemic has actually been a positive for Planet 13 in that it forced the company to move beyond its tourist ties in Vegas in order to attract locals. With a healthy mix of recurring local sales and tourism returning to Sin City, Planet 13 appears ready to bring in the green.
Image source: Getty Images.
PubMatic: 58% below 52-week high
Another game-changing stock that's on sale and ready to be scooped up by investors is advertising technology small-cap PubMatic (PUBM -0.74%). Shares of the heavily short-sold company are closing in on a 60% decline from its 52-week high.
PubMatic is a sell-side platform (SSP) in the programmatic ad-tech space. In English, this means it represents publishers and helps them sell their display space to advertisers using machine-learning algorithms. The platform is clearly resonating with publishers, given that existing clients spent 30% more in the first quarter of 2021 than they did in the year-ago quarter.
The advantage of PubMatic's cloud-based ad infrastructure is that it'll benefit from ongoing cord-cutting and a shift of content to online and mobile sources. As a result, management foresees a consistent double-digit revenue-growth opportunity emerging from mobile, digital video, and connected TV/over-the-top programmatic ads for at least the next four years, if not longer. Even though PubMatic will be continuously investing in technology to help it optimize the ads shown to users, it's already quite profitable and has shown no signs of SSP demand slowing.
In other words, it's a fantastic candidate to bounce back from its recent lows.
Image source: Getty Images.
Novavax: 43% below 52-week high
Biotech stock Novavax (NVAX -2.51%) also finds itself on the sales rack in what's been a highly volatile year for the drug developer. Emergency-use authorization filing and production delays concerning its lead coronavirus disease 2019 (COVID-19) vaccine candidate, NVX-CoV2373, have whipsawed shares of late, pushing them 43% below their 52-week high.
Although these delays could cost Novavax some very near-term sales potential in the U.S., the company's COVID-19 vaccine looks like a slam dunk to receive emergency-use authorization. In a large-scale U.K. study and a subsequent phase 3 study in the U.S. and Mexico, Novavax's COVID-19 vaccine delivered an efficacy of right around 90%. That could well be enough to boot less-effective/controversial vaccine options from AstraZeneca and Johnson & Johnson completely out of the picture. If that's the case, Novavax would still offer plenty of sales potential globally, even with a late entrance.
Additionally, Novavax is in the early stages of developing a COVID-19/influenza combination vaccine that would allow it to really stand out. This could make it a major player in initial and/or annual booster vaccines.
Conservatively, Novavax looks to be valued at a little over five times Wall Street's forward-year profit projections, and less than three times full-year sales in 2022. That's a bargain for an innovative drug developer.
Image source: Pinterest.
Pinterest: 35% below 52-week high
A fifth and final game-changing stock that can be purchased at a discount is social media up-and-comer Pinterest (PINS 0.21%). Taking into account its post-earnings plunge after monthly active users (MAU) declined from the sequential first quarter, Pinterest's stock ended last week 35% below its 52-week high.
Though it might be disappointing to see the company's MAUs decline by 24 million in the second quarter from Q1 2021, the rate of growth tied to the pandemic was simply unsustainable. Even with this decline, historic user growth remains well within historic norms for Pinterest.
What's arguably more important is that advertisers have been willing to pay a pretty penny to reach Pinterest's user base of 454 million, as of June 30, 2021. Global average revenue per user (ARPU) jumped 89% in the second quarter from the prior-year period, with international ARPU up an even more robust 163%. Since international ARPU can be doubled multiple times this decade, these overseas MAUs are Pinterest's key to sustainable double-digit growth.
Ultimately, we're still in the early stages of witnessing Pinterest monetize its platform and transform into a popular e-commerce destination. With a user base willingly sharing the things, places, and services that interest them, Pinterest simply has to connect these motivated shoppers with merchants that specialize in their interests.
