Despite volatility rearing its head over the past couple of weeks, it's been another stellar year for the stock market. Through Dec. 6, the benchmark S&P 500 has gained 22% on a year-to-date basis. That essentially doubles up the average annual total return, including dividends, of the S&P 500 since 1980 (about 11%).
But just because the broader market is up big, it doesn't mean there aren't still bargains to be found. For patient investors who lean on time as their ally, there are plenty of stocks that can make them richer.
Best of all, you don't need a mountain of money to build wealth on Wall Street. With most brokerages eliminating minimum deposit requirements and trading commissions, any amount of money -- even $200 -- can be the right amount to grow your portfolio.
If you have $200 ready to invest, the following are some of the smartest stocks you can buy in December.
One of the smartest buys investors can make is scooping up shares of premier cybersecurity stock CrowdStrike Holdings (CRWD 0.53%).
Cybersecurity may not be the fastest-growing trend, but there's arguably not a safer double-digit growth opportunity through the midpoint of the decade. Since hackers and robots don't take time off just because the U.S. economy or stock market hit a rough patch, businesses are increasingly turning to third-party providers to secure their data and that of their clients.
What makes CrowdStrike special is its cloud-native Falcon security platform. Falcon relies on artificial intelligence to grow smarter over time and is currently overseeing about 1 trillion events per day. As a cloud-based platform, Falcon is often better at recognizing and responding to threats than on-premises solutions. While CrowdStrike's solutions aren't the cheapest on a nominal basis, the long-term reward of data protection makes Falcon a more cost-effective platform for businesses.
The proof is in the pudding that clients are thrilled with CrowdStrike's suite of services. The total number of subscribers has skyrocketed from 450 to almost 14,700 in less than five years, with 68% of its clients purchasing four or more cloud-module subscriptions, as of Sept. 30. The latter is up from under 10% less than five years ago. The company's customer retention rate has also hovered around 98% for two years running.
CrowdStrike's stock isn't inexpensive using standard fundamental metrics. However, a valuation premium is certainly warranted with its subscription gross margin already at its long-term target this early in its expansion.
Keep in mind that it's not just growth stocks that are begging to be bought. Value and income plays like telecom stock AT&T (T 1.85%) represent a smart way to put $200 to work right now.
To state the obvious, AT&T's high-growth heyday is long gone. But just because the company has matured, it doesn't mean there aren't organic growth opportunities on its doorstep.
For instance, AT&T should benefit nicely from the ongoing rollout of 5G wireless infrastructure. Although upgrading its infrastructure won't be cheap, the investment will pay off handsomely. That's because it's been a decade since wireless download speeds were meaningfully improved. With 5G becoming widely available, consumers and businesses are liable to undertake a multiyear device upgrade cycle to take advantage of a faster network. Since the bulk of AT&T's wireless margins derive from data consumption, 5G should provide a healthy shot of organic growth through at least 2025.
AT&T is also in the process of spinning off its content arm, WarnerMedia, and combining it with Discovery to create a new media powerhouse. The new company should have over 85 million streaming subscribers, a more diverse content library, and it'll be able to cut its operating costs by over $3 billion a year.
At an estimated 7 times forecasted earnings per share this year, and a high-yield dividend to boot, AT&T is one of the smartest value and income plays to buy now.
Another genius purchase investors can make in December with $200 is biotech stock Exelixis (EXEL -0.87%).
Exelixis has had a bit of a rough year, with its shares down close to 20%. The cancer-focused drug developer disappointed Wall Street in late June when it unveiled interim analysis data from the late-stage Cosmic-312 study in patients with previously untreated liver cancer. The company's lead drug, Cabometyx, was paired with atezolizumab (better known by its brand name, Tecentriq) in this study. While progression-free survival data hit the mark, the company noted it was unlikely that overall survival data would show a statistically significant improvement versus Nexavar.
Though this was undoubtedly disappointing, as first-line hepatocellular carcinoma (HCC) is an indication that could use more-effective treatments, the downside Exelixis' shares have seen since this data release looks to be an overreaction.
Even assuming the Food and Drug Administration doesn't grant this combo treatment approval in first-line HCC -- the company plans to file a supplemental new drug application in Q1 2022 -- Cabometyx is in line for well over $1 billion in annual revenue from first- and second-line kidney cancer indications and more advanced cases of HCC.
Furthermore, Cabometyx is being examined in close to six dozen clinical trials. Some failures are expected. But if even a handful of these studies result in label expansion opportunities, Cabometyx could surpass $2 billion in annual sales.
With Exelixis sitting on a whopping $1.8 billion in cash, cash equivalents, and restricted cash equivalents and investments (this is about 35% of its market cap), and the company's price-earnings-to-growth ratio well below 1, it has all the hallmarks of a screaming buy.
Walgreens Boots Alliance
A final smart stock investors can buy with $200 in December is pharmacy chain Walgreens Boots Alliance (WBA 0.80%). Similar to AT&T, this is another value/income play that's not getting the love it deserves.
Normally, healthcare stocks aren't adversely affected by economic downturns. Since we can't control when we get sick or what ailment(s) we develop, there's always demand for drugs, devices, and healthcare services. But during the pandemic, Walgreens wasn't as lucky. Reduced foot traffic hurt demand for front-end sales and clinic revenue.
That's the bad news. The good news is Walgreens is incredibly inexpensive following the worst of the pandemic, and it's already well into a multipoint turnaround plan designed to increase margins and boost its organic growth rate.
Initially, management anticipated reducing annual operating expenses by $2 billion as of the end of fiscal 2022. But cost-cutting activity has been far better than expected. Walgreens achieved more than $2 billion in annual cost reductions, and it did so by the end of fiscal 2021.
However, it's not cost-cutting that should have investors excited. Rather, it's the company's investments. For example, Walgreens has spared no expense when it comes to its investments in digitization. Placing greater emphasis on direct-to-consumer sales should result in sustainable double-digit online revenue growth.
Walgreens has also partnered with VillageMD to open more than 600 full-service clinics in over 30 U.S. markets by 2025. These co-located clinics will be physician-staffed and should play a key role in funneling local residents to the company's higher-margin pharmacy.
At less than 10 times Wall Street's forecasted earnings per share for fiscal 2022, Walgreens Boots Alliance is a steal.