Time and again, patience has proven to be a winning strategy on Wall Street. Despite the broad-based S&P 500 losing 34% of its value in 33 calendar days during the first quarter of 2020, the benchmark index has roared back to more than double off of its bear-market low. In fact, this is the strongest bounce-back rally from a bear-market bottom in history.
While some investors might be leery of putting money to work within the market so close to a new all-time high, this isn't a concern if your investing time frame is measured in years and you're buying into high-quality businesses.
What's more, you don't need a boatload of cash to build wealth on Wall Street. With most brokerages eliminating minimum deposit requirements and trading commissions, any amount of money -- even $250 -- can begin or further your trek to financial independence. If you have $250 you can put to work in the market, the following trio of no-brainer stocks can be confidently purchased right now.
Image source: Getty Images.
Teladoc Health
Arguably the no-brainer buy of the week (to hold for many years to come) is telemedicine kingpin Teladoc Health (TDOC -0.07%).
As you can imagine, shares of Teladoc were a hot commodity in the wake of the coronavirus pandemic. With physicians closing their offices or minimizing patient visits, virtual-visit platforms became especially popular. Last year, Teladoc handled just shy of 10.6 million virtual visits, which was up from 4.14 million in 2019.
However, Teladoc's stock has been clobbered since mid-February. Since peaking, its shares are off nearly 57%. Wall Street has been less than pleased with the company's wider-than-anticipated losses tied to its acquisition of applied health signals company Livongo Health in the fourth quarter of 2020. Additionally, there's been skepticism about Teladoc's growth potential following the pandemic. The fact of the matter is that neither of these short-term worries should concern long-term investors.
What Teladoc is doing is nothing short of reshaping the personalized treatment landscape within the healthcare space. This wasn't a one-hit pandemic wonder. Rather, pardon the pun, it was a shot in the arm that accelerated a shift to increased telemedicine usage. In the six years prior to the pandemic, Teladoc's annual sales growth averaged 74%. A company doesn't average 74% sales growth over six years if it's pushing a fad service.
The company's platform is making it easier than ever for physicians and patients to connect. It's an especially powerful tool for physicians to keep up with their chronically ill patients. The expectation is that increased virtual-visit usage will lead to improved patient outcomes and less money out of the pockets of insurers.
The acquisition of Livongo is also a game-changer. Livongo collects copious amounts of data on chronic-care patients and leans on artificial intelligence to send its members tips to help them lead healthier lives. This was a profitable company prior to the acquisition, and it was practically doubling its member count every year.
What's particularly exciting about the Livongo purchase is the company's push to help people with hypertension and weight control management issues. Livongo is predominantly focused on helping people with diabetes at the moment, but its potential pool of members within the U.S. encompasses a large swath of the adult population. With Livongo under its umbrella, Teladoc looks unstoppable.
Image source: Getty Images.
Trulieve Cannabis
Another absolute no-brainer stock investors can buy right now with $250 is Trulieve Cannabis (TCNNF 2.03%).
Although marijuana stocks were all the rage in the first month of the Joe Biden presidency, they've lost their buzz since mid-February. Wall Street and investors seem to have cooled on the prospects of federal legalization anytime soon, which has poured cold water on the smoldering cannabis industry. Thankfully, this recent retracement is the perfect opportunity to buy into the most profitable pure-play pot stock, Trulieve, on a nominal basis.
To begin with, federal legalization would be a plus, but it's hardly a necessity for larger-scale multistate operators (MSOs). To date, we've witnessed 36 states legalize medical marijuana, half of which also have laws on their books to allow for the consumption and/or retail sale of adult-use pot. MSOs like Trulieve aren't hurting for organic and inorganic opportunities, no matter what happens on Capitol Hill.
As for the company, it's taken a rather unique approach to growth. Instead of setting up shop in as many potential billion-dollar legalized markets as possible, Trulieve Cannabis has focused nearly all of its attention on medical marijuana-legal Florida. As of Sept. 2, the company had 102 dispensaries open nationwide, 91 of which were located in the Sunshine State.
This accounts for roughly a quarter of all statewide dispensaries, but it's allowed Trulieve to gobble up approximately half of the state's dried cannabis and oils market share. By saturating Florida, Trulieve has been able to keep its marketing costs down, which pushed it to recurring profits three years earlier than many of its peers.
And the Trulieve Cannabis growth story isn't close to being over. The company appears to be very close to closing its all-stock deal to acquire MSO Harvest Health & Recreation (HRVSF). Harvest Health has a five-state focus, but its 15-dispensary presence in its home market of Arizona is the prize of this buyout. The Grand Canyon State legalized adult-use weed this past November and kicked off sales of recreational marijuana two months later. Trulieve could easily become the most dominant player in Arizona's cannabis market.
The bottom line is that investors can buy a company expected to grow sales by 73% in 2021 and 49% in 2022 for 18 times Wall Street's forward-year earnings per share. That's a big-time bargain.
The recently unveiled GMC Hummer electric vehicle. Image source: General Motors.
General Motors
For you diehard value investors out there, auto stock General Motors (GM -0.04%) looks like a no-brainer company to buy and hold for years to come.
At one point recently, shares of GM had retraced by roughly 25% from their early June all-time high. This retracement likely has to do with ongoing semiconductor chip supply issues. Without these chips, automakers like GM have had to scale back production for certain models. That's bound to hurt the company's near-term sales and profit potential. But as with Teladoc and Trulieve above, none of these concerns adversely affect the long-term thesis in GM.
Let's start with the obvious: The electrification of autos is going to be a multi-decade opportunity for GM and automakers worldwide. Fighting climate change takes action, and governments are pushing businesses to proactively make changes. General Motors has heeded these calls by making aggressive investments in its future.
In late May, GM upped its previous spending projection on electric vehicles (EVs), autonomous vehicles, and batteries to $35 billion through 2025. The expectation is for GM to launch 30 new EVs worldwide by 2025. Aside from the changing auto landscape, CEO Mary Barra suggested that increasing the company's commitment to EVs made sense after strong initial positive reactions to the unveil of the Chevrolet Silverado electric pickup and the Hummer EV.
Although General Motors is known for being a dominant player in the U.S., its most attractive long-term opportunity might be China. The world's No. 2 country by gross domestic product is the largest auto market on the planet. GM is on pace to sell approximately 3 million vehicles in China this year, meaning it already has an established presence and the infrastructure in place to support a shift to EVs.
Despite being valued at a single-digit price-to-earnings multiple for years, General Motors has a genuine opportunity to expand its valuation multiple with higher sustainable growth rates over the next couple of decades. Though the ride could be bumpy at times, paying a little over 7 times forward-year earnings for GM is a steal.
