If you have $5,000 you can afford to invest, now may be an ideal time to do so. Many top growth stocks have been falling, and there are many great options out there. With an investment of $5,000, you could find yourself with a nice return after buying and holding stocks for at least three to five years.
A couple of the better deals out there right now include Ayr Wellness (AYRW.F 2.60%) and Walt Disney (DIS -0.04%). Both stocks have been struggling of late, but their futures looks solid. I expect their share prices to recover as early as next year.
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1. Ayr Wellness
Cannabis producer Ayr Wellness is a promising growth stock to own. It has big plans for expansion over the next few years, eyeing some of the top marijuana markets in the country.
In its most recent quarter for the period ending Sept. 30, Ayr Wellness reported sales of $96.2 million, which was more than double last year's tally of $45.5 million. Heading into 2022, the company has high hopes that it can continue building on that growth as it has multiple acquisitions that it expects will close in the first half of next year.
It's also adding to its capacity in multiple states, including Florida and Arizona, and is banking on growth in New Jersey -- one of the nation's newest recreational pot markets (in which sales will commence next year). All of this has Ayr Wellness expecting its revenue next year to rise to $800 million, making it among the top multi-state operators (MSOs) out there.
Today, however, the stock is struggling and is down more than 44% year to date, while the Horizons Marijuana Life Sciences ETF has declined by 19%. There isn't an overwhelming reason to be bearish on the stock. The recent decline appears to be in line with general softness in the cannabis market due to a lack of progress on the legalization of marijuana at the federal level, which still looks like it could be years away. And because Ayr is still one of the smaller players in the industry, investors may see it as a bit of a riskier buy than other pot stocks.
But if Ayr realizes its goals next year, it could be a scorching-hot buy. Even now, compared to other MSOs, this is cheap stock when looking at its price-to-sales (P/S) multiple:
AYRWF PS Ratio data by YCharts
The pot stock is trading at its 52-week low, making now a great time to buy it. If you're able to remain patient with Ayr, this is an investment that could pay off significantly in just a few years.
2. Walt Disney
Entertainment company Walt Disney is another stock that's becoming more attractive by the day. It has fallen 18% this year, while the S&P 500 has risen 23%. Investors have turned bearish on the stock after Disney reported fourth-quarter numbers last month that failed to generate much excitement. Revenue, earnings, and subscriber numbers from its Disney+ streaming service came in lower than analyst expectations.
During the period ending Oct. 2, the company added 2.1 million Disney+ subscribers, finishing the quarter at 118.1 million. But by the end of fiscal 2024, it projects that it will reach between 230 million and 260 million paid subscribers. CEO Bob Chapek stated on the company's earnings call that he isn't worried about managing from one quarter to the next but, instead, remains focused on the long term, a sobering reminder to investors to not lose sight of the bigger picture.
What should have investors excited is that the company's business is likely to do even better once the economy opens fully back up. In Q4, the company's parks, experiences, and products segment generated $5.5 billion in sales and doubled from last year's tally of $2.7 billion. On a year-to-date basis, that segment is still down 3% from 2020.
In both Disney+ and its theme-park business, there's room for Disney to generate much more growth in the quarters and years ahead. Although the stock has recovered since hitting a new 52-week low, it's still a good buy, as multiple brokerages expect that its shares could rise to at least $200, which would be a return of 33% or more from where they are today.
