Bear Market Bargains: 3 Growth Stocks to Load Up On

The U.S. stock market just finished its worst first half since 1970. Amid a drawn-out decline that began in the latter stages of 2021, many stocks have been under pressure for the bulk of the past year. The S&P 500 has fallen by almost 13% over the past 12 months and is down more than 20% from its January peak. That downward pressure could persist in the weeks and months ahead, as inflation remains a big problem.

Long-term investors could end up being the big winners from this bear market, though, because those who buy the right stocks at today's discounted levels and hold onto them could enjoy some incredible profits. Three stocks that I see as being among the best bargain buys today are Trulieve Cannabis (TCNNF -1.84%), Restaurant Brands International (QSR -0.13%), and Airbnb (ABNB -0.43%).

1. Trulieve Cannabis

Trulieve Cannabis is a leading company in the marijuana industry. It has more than 160 locations across the country, the top among multi-state operators. (Rival Curaleaf reported 128 locations as of the end of March.)

Most of its locations are in Florida, a state that hasn't even legalized marijuana for recreational use yet, and it doesn't look like that will change this year. But more than three-quarters of Florida residents support legalizing recreational use, so it's only a matter of time before the recreational market opens up there. And when it does, that will instantly put Trulieve in an excellent position to take advantage and accelerate its growth.

Though the business has been growing, Trulieve's stock is down 70% over the past year. Marijuana stocks broadly have performed poorly over that stretch: The industry benchmark Horizons Marijuana Life Sciences is down by 66% over the past year.

This year, Trulieve management anticipates that sales will land between $1.3 billion and $1.4 billion, up from $938 million in 2021. That growth will come in large part from its acquisition of multi-state marijuana operator Harvest Health, which Trulieve closed on in October. The transaction has broadened Trulieve's business and set it up for even more growth opportunities throughout the country.

Trading at just 1.8 times revenue, Trulieve looks like a relative bargain, as it has historically traded above a multiple of 3. And once the recreational pot market in Florida opens for business, investors will likely pay more of a premium for the stock given the company's strong presence in the Sunshine State. Buying the stock well before that happens could be a great move for long-term investors.

2. Restaurant Brands International

Restaurant Brands International owns Burger King, Popeyes, Tim Hortons, and Firehouse Subs. After a rough few years due to the pandemic, the company could be in a prime position to benefit as people are eager to get back to their former routines. And amid this period of high inflation, Restaurant Brands' modestly priced fast-food chains offer consumers attractive options.

Conditions were looking good for the company through the first three months of 2022. Its comparable sales growth of 8.4% was a sharp reversal from the 2.3% decline the company reported in the prior-year period. Its fastest-growing chains were also its largest -- Tim Hortons and Burger King, which generated year-over-year sales growth of 16.8% and 9%, respectively.

In the past year, Restaurant Brands International's stock declined by 20%. Trading at just 19 times earnings, it's relatively cheap now. It has often traded at more than 25 times earnings in years past. An added incentive to load up on the stock is that in the wake of that drop in price, its dividend now yields 4.2% -- well above the S&P 500's average yield of 1.7%.

3. Airbnb

Another recovery stock that looks good today is Airbnb. Its shares have fallen by 40% in the past year, but there are currently more reasons to buy it than to sell. As with Restaurant Brands International, there are signs that this travel company's recovery is already well underway. 

In the first quarter, Airbnb reported year-over-year sales growth of 70% with revenue totaling $1.5 billion. That was also 80% better than its pre-pandemic Q1 2019 result. It also generated record free cash flow of $1.2 billion in its most recently reported quarter.

Airbnb isn't consistently profitable yet, so it's not useful to look at its price-to-earnings ratio. But in terms of its price-to-sales ratio -- now just under 9 -- it hasn't traded lower since it went public in 2020. Between its modest valuation and the pent-up demand for travel that consumers could be preparing to satisfy, Airbnb is an underrated stock to buy right now.