2022 has gotten off to a rocky start for investors. The SPDR S&P 500 ETF (SPY -0.52%) and the Invesco QQQ Trust (QQQ -0.65%) -- which tracks the Nasdaq 100 index -- fell sharply in the year's first week. Thus far in week two, the major indexes have recovered somewhat, but they were still down for the year as of this writing. 

The broad market indexes were at their all-time highs before this latest dip, yet many high-quality stocks were getting crushed long before 2022 began. In some cases, though, the businesses underlying those stocks were performing amazingly well -- creating a significant disparity between the share price and the business. Last week, I decided to capitalize on two such opportunities, adding to my positions in companies that I think will thrive over the next five years: PayPal (PYPL -1.49%) and Airbnb (ABNB -0.99%)

Person grocery shopping online

Image source: Getty Images.

PayPal: A fintech powerhouse

PayPal is quickly becoming the fintech platform that everyone uses. More than 416 million users made a total of 4.9 billion transactions via its services in 2021's third quarter alone. More importantly, these users are relying more on PayPal in their everyday lives. Over the trailing 12-month period, the company reported that its average transactions per active account rose 10% year over year to 44.2.

All of this makes sense considering PayPal has partnered with big-name retailers like Walmart and Amazon to allow their customers to pay using its popular Venmo app. As a whole, PayPal checkout is an option at 75% of the top 1,500 largest retailers in North America and Europe. 

Not only can PayPal users make payments via the platform, but they can also use it to buy and sell cryptocurrency, use PayPal's credit card, and even donate money to charity.

As a result of its massive footprint in the fintech world, PayPal has become an investor's dream. The company generated $1.3 billion in both free cash flow and net income in Q3 2021.

The reach of its network makes its ecosystem highly attractive to users, and the benefits keep growing as it adds popular services like crypto trading and buy-now-pay-later services. Its competitive advantages as a leading global fintech platform and its jaw-dropping profitability are the chief reasons why I've owned shares of the company for a long time, and the recent drop in price was why I increased my position.

The company trades now at around 46 times earnings -- a valuation that has been around the bottom of its range (and rarely touched) since 2018. Shares are also around their 52-week low. If a company trades at rock-bottom prices despite having 21% net income and a 20% free cash flow margin -- as PayPal does -- I am going to buy shares.

Airbnb: The only place I shop for vacations

Airbnb is in a similar place. The stock price is down by more than 20% from its all-time high, and is trading at around 20 times sales, near an all-time low. Based on that, you might assume that Airbnb is struggling operationally, but, in fact, it's looking strong. 

I use Airbnb for all of my vacations because of the unique and beautiful homes, treehouses, and other options it offers. Rival platforms like Vrbo try to replicate its model, but they simply cannot compete with Airbnb's diverse and massive offerings. This edge is why it has succeeded and grown rapidly, even during the pandemic.

ABNB Revenue (Quarterly) Chart
Data by YCharts.

Airbnb is one of the only hospitality companies that is back to its former highs in terms of revenue, showing just how resilient it is compared to its competitors. This has likely been helped by the anti-fragile nature of Airbnb's business of hosting unique stays in properties that -- for the most part -- make it easier to keep your distance from other travelers in a way that hotels simply can't. In terms of a treehouse, for example, you could be so far away from your neighbors that you could feel comfortable about vacationing, and the uniqueness of living in a treehouse for a week is a vacation in itself. In addition, Airbnb's ability to shift on a dime to accommodate intensified cleaning regulations and safety procedures also undoubtedly helped the company to bounce back more quickly than its competitors.

While I love this business, it is a risky stock. Airbnb was profitable in Q3 2021 with $834 million in net income, but it hasn't had a track record of profitability. In that quarter, its trailing 12-month net loss was $4.3 billion -- most of which occurred in Q4 2020, when it posted a net loss of $3.9 billion. Airbnb's net income has been trending in the right direction, and with stock-based compensation from its IPO fading away, its bottom line could stabilize in positive territory. 

This pandemic has created the worst business environment imaginable for hospitality companies, yet Airbnb is coming out of it stronger than ever. This gives me incredible confidence that the company will be able to step up to the plate when other troubles arise for it. I like the company's prospects over the next five years, its resilience, and its competitive edge. Given all that and its valuation near an all-time low, I added to my position this month.