Investing in the stock market has been a bit of an adventure in 2022. Over the past three months, all three major U.S. indexes have undergone their steepest corrections in two years. In fact, the technology-dependent Nasdaq Composite briefly entered bear market territory.
While the velocity of moves lower in the broad-market indexes can, at times, be scary, the key thing to remember is that pullbacks are always an opportunity for patient investors to go on the offensive. That's because every single crash or correction throughout history has eventually been placed into the rearview mirror by a bull market rally.
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Just as important, you don't need a mountain of cash to take advantage of these dips in the stock market. Since most online brokerages ditched commission fees and minimum deposit requirements, any amount of money -- even $300 -- can be the perfect amount to invest.
If you have $300 at the ready, which won't be needed for bills or to cover emergencies, here are some of the smartest stocks you can buy on the dip.
Teladoc Health
The first beaten-down stock to buy with $300 is the kingpin of telemedicine, Teladoc Health (TDOC -1.24%).
Skeptics have had two big issues with Teladoc over the past year. To begin with, they believe the company has enjoyed a pandemic-related benefit and its growth will slow dramatically when we exit the pandemic. Second, skeptics are concerned about Teladoc's back-to-back years of larger-than-expected losses following the pricey acquisition of Livongo Health. While I understand where this opposing view is coming from, neither of these headwinds has legs to stand on.
Although Teladoc did benefit nicely during the initial stages of the pandemic, investors need to recognize that this shift to virtual visit healthcare platforms began well before 2020. In the six years leading up to the pandemic, Teladoc's sales grew by an average annual rate of 74%! That's not a fluke. It's a sign that the way personalized care is administered in the U.S. is changing.
Telehealth is a win for all parties up and down the healthcare treatment chain. It's often more convenient for patients to connect with physicians from their homes, while virtual visits allow physicians to keep better tabs on chronically ill patients. The end result should be improved patient outcomes and less money out of the pockets of health insurers.
As for Teladoc's larger losses, these should be a thing of the past. With Livongo's integration costs and stock-based compensation expected to decline significantly in 2022, the company has a pretty clear path to profitability by 2024, if not sooner.
Furthermore, don't overlook the importance of Teladoc and Livongo being able to cross-sell on each other's platforms. Though the Livongo deal was pricey in hindsight, it's going to fuel sustainable sales growth of 20% to 30% throughout the decade. This makes the nearly 80% retracement in Teladoc's shares since February 2021 an ideal buying opportunity.
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Qorvo
Another smart stock that's begging to be bought with $300 is semiconductor solutions company Qorvo (QRVO 1.77%). Shares have retraced by roughly 35% over the past nine months, which doesn't make much sense given how well Qorvo has been executing.
There are three core catalysts that should have investors excited about the discount they can nab on Qorvo right now.
To start with, it should be a prime beneficiary of the 5G wireless revolution. It's been about a decade since wireless download speeds were meaningfully improved. Upgrading 5G wireless infrastructure should encourage a steady device replacement cycle that lasts for years. Qorvo is responsible for providing a variety of connectivity solutions used in next-generation smartphones. Thus, the more smartphones that are manufactured and sold, the more opportunity the company has to get its solutions into 5G-capable devices.
The second catalyst, which effectively builds on the first, is Qorvo's tight-knit relationship with Apple. Last year, Apple was responsible for approximately 30% of Qorvo's annual sales. There may not be a company in the world with a more loyal customer base than Apple, meaning the 5G-capable iPhone, and its many variations, should continue to drive revenue and profit growth for Qorvo.
The third upside impetus is the company's ancillary revenue opportunities outside of smartphones. For instance, Qorvo provides advanced antennas that allow next-gen automobiles to connect to the cloud. While these ancillary revenue streams take a back seat to smartphones in terms of total sales, they'll likely be a faster growth opportunity throughout the decade.
With Qorvo offering low double-digit sales growth and a forward-year price-to-earnings ratio of just 10, it looks to be a perfect blend of growth and value.
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AT&T
For you value investors, telecom stock AT&T (T 1.45%) might just be one of the smartest places to put $300 to work right now. Shares of the widely followed company have retraced by 30% since hitting a 52-week high back in May 2021.
The big knock against AT&T in recent years has been its lack of growth and the high debt levels that have somewhat constrained its financial flexibility. The good news is AT&T has a way to address both of these concerns in the coming years.
To echo what was said about Qorvo, AT&T should notably benefit from the ongoing rollout of 5G wireless infrastructure. Even though it'll be costly and time-consuming for AT&T to upgrade its network, faster download speeds will encourage the company's wireless subscribers to use more data. Since data consumption drives the company's juicy wireless margin, it's a no-brainer way to boost its organic growth rate.
The other significant growth catalyst for AT&T is the coming spin-off of its content arm, WarnerMedia, and the subsequent merging of WarnerMedia with Discovery to create a new media entity. This new company, WarnerMedia-Discovery (no points awarded for originality), should recognize more than $3 billion in annual cost savings and have in the neighborhood of 94 million streaming customers (on a pro forma basis).
Following the spinoff, AT&T will be focused on debt reduction. Even though its dividend will be slightly more than halved in order to reduce cash outflow and pay down debt, the company will maintain its high-yield status. This superior yield can come in especially handy in a high-inflation environment.
Compared to Teladoc and Qorvo, AT&T is a turtle on the growth front. But its telecom and media operations are highly profitable and very predictable from a cash flow perspective. This makes AT&T's shares an absolute steal at less than 8 times forecast earnings for 2022.
