3 Stocks Down 50% or More That You Can Buy Right Now

Steep stock declines are always painful for investors who own the falling stocks. However, such sell-offs can provide great buying opportunities.

We asked three Motley Fool contributors to identify stocks that are down 50% or more that you can buy right now. Here's why they picked Ginkgo Bioworks Holdings (DNA -3.84%), Novavax (NVAX -3.15%), and Novocure (NVCR -2.04%).

A boatload of potential

David Jagielski (Ginkgo Bioworks Holdings): Unprofitable growth stocks haven't been getting much love on the markets these days. One of the more beaten-up ones is Ginkgo Bioworks. The company, which helps its customers program cells, has lost close to 60% of its value since the start of the year. At its peak last year, the biotech stock was trading at nearly $16 per share.

The appeal behind the stock is that its operations have the potential to touch multiple industries. Ginkgo can help companies with gene therapy, nucleic acid production, pest control, sugar reduction, and producing cultured cannabinoids. And those are just a few examples of the ways it can add value for businesses.

Ginkgo is coming off a strong year in 2021 with sales of $314 million -- more than four times the $77 million it reported in 2020. While that growth rate will slow down this year, the company still anticipates its top line will come in between $375 million and $390 million. At the mid-point, that would mean growth of 22%.

In the first three months of this year, the company added 11 cell programs, which is a 175% increase year over year. Ginkgo plans to bring on more business as the year goes on, projecting that it will add a total of 60 new cell programs in 2022. Many big-name healthcare companies have already partnered with Ginkgo, including Moderna, Bayer, and Novo Nordisk. It will require some patience for investors to see all these programs materialize into a stronger top line for the business, though, as they will take time to develop.

Although Ginkgo likely won't be profitable anytime soon, the company has an incredibly strong cash balance of $1.5 billion on its books. During the past three months, it only burned through $20 million over the course of its day-to-day operating activities.

With solid liquidity and many growth opportunities, this could be a top stock to hang on to for the long haul.

Down but not out

Prosper Junior Bakiny (Novavax): Many companies are still looking to jump into the COVID-19 vaccine market in the U.S. Novavax is arguably the leader of this pack of latecomers. The biotech's candidate, NVX-CoV2373, has already been approved or granted emergency use authorization (EUA) in many countries worldwide. 

On June 7, a panel of experts convened by the U.S. Food and Drug Administration (FDA) voted 21 to 0 (with one abstention) in favor of authorizing NVX-CoV2373. The FDA doesn't always listen to the advice of these experts, but it does so most of the time. And while the agency flagged rare cases of myocarditis and pericarditis that could be associated with NVX-CoV2373, other approved vaccines also had to deal with the risk of potentially severe adverse reactions.

Novavax could launch its vaccine in the U.S. soon, pending a positive EUA decision from the FDA. The pandemic isn't over; even if it does end, COVID-19 could enter an endemic phase. Given that Novavax's candidate is a protein-based vaccine, it could successfully carve a niche in the U.S. market. The COVID-19 vaccine market leaders in the U.S. are mRNA-based options, a relatively new method of developing vaccines.

Some in the U.S. have been skeptical of mRNA vaccines. According to a recent poll, 73% of Americans would like COVID-19 vaccines developed from more traditional methods. Novavax's candidate fits the mold.

The company also has other promising programs, especially NanoFlu, a flu vaccine for patients 65 and older who make up a disproportionate percentage of hospitalizations and deaths related to this potentially deadly illness.

Overall, Novavax's future still looks bright, especially considering its shares have dropped by close to 70% in the past year. With a forward price-to-earnings ratio of 2.3 -- compared to the biotech industry's average of 12 -- Novavax looks like a steal at current levels.

Big catalysts on the way

Keith Speights (Novocure): Novocure is actually performing relatively well so far in 2022. Shares are even up a little. However, the biotech stock is still close to 70% below its 52-week high. Several big catalysts could be on the way for Novocure, though.

The company already markets Optune (also known as Tumor Treating Fields) as a treatment for glioblastoma and mesothelioma. This therapy uses electrical fields that are tuned to specific frequencies to disrupt the division of tumor cells.

Novocure expects to announce results from a late-stage clinical study evaluating Tumor Treating Fields in non-small cell lung cancer this year. Data from two other phase 3 studies targeting ovarian cancer and brain metastases are anticipated in 2023. And in 2024, the company should report results from another pivotal study in treating pancreatic cancer. 

There's no guarantee that Novocure will achieve success in all of these studies. However, I think the company's chances look quite good. The future for Novocure should be very bright if I'm right. Those four additional indications for which late-stage results are on the way represent a combined market that's 14 times larger than the company's current market opportunity.