Don't Wait for a Market Crash: These 2 Top Stocks Are on Sale

Market timing isn't a great strategy. While you may be able to come close to the bottom a few times, consistently timing the bottom is something very few investors have been able to do. Instead, investors are much better off taking a position in solid companies immediately and benefiting from long-term stock ownership.

Fortunately, many stocks are on sale right now, and you don't even need to wait for the market to crash (despite being an unwise strategy). I think CrowdStrike Holdings (CRWD -2.90%) and MercadoLibre (MELI -1.75%) have massive upside, and with each stock down around 35% and 45% from their all-time highs, respectively, each represents a great buying opportunity. 

1. CrowdStrike Holdings

Cyberattacks are a growing concern across consumers, businesses, and governments. A lot of personal, sensitive information is stored throughout servers, and hackers are itching to break in and steal it. One of the most common ways to breach a server is simply by accessing a network endpoint (like a laptop or phone) and acting like a typical user.

CrowdStrike protects against these threats and many more with its cloud-first cybersecurity offering. It secures network endpoints by analyzing trillions of data points weekly to determine what is normal operations and what is a threat.

Once a threat is detected, it can quickly isolate and defeat it, so its customers' servers remain secure. Furthermore, information about that attack is automatically spread to other CrowdStrike customers so the platform can continuously evolve and become more secure.

The demand for this platform has exploded in recent years. At the start of 2019, CrowdStrike has 1,242 customers. Fast-forward to the Q1 fiscal year 2023 (ending April 30), and CrowdStrike now has 17,945 customers, including 65 of the Fortune 500 and 15 of the top 20 U.S. banks.

Customer growth translates to revenue growth, and CrowdStrike's annually recurring revenue (ARR) rose 61% YOY (year over year) to $1.9 billion in Q1. However, through new product releases and existing customer expansion, CrowdStrike believes it can achieve $5 billion in ARR by the end of FY 2025 (Jan. 31, 2026).

This rapid growth makes CrowdStrike an ideal stock to buy and hold for the long term. Additionally, CrowdStrike is free cash flow positive and generated a 32% margin during Q1. This profitability means CrowdStrike generates more cash than it spends, so it can continuously operate without outside intervention.

All of these positive attributes combine to make CrowdStrike an expensive stock. At 91 times free cash flow and 26 times sales, CrowdStrike's valuation is a risk. However, with strong and likely recession-proof growth ahead, CrowdStrike is a strong candidate to outperform the market over the next five years.

2. MercadoLibre

In the U.S., e-commerce is powered by many companies. However, it takes multiple websites, transportation services, and payment processors to process a consumer's order. In Latin America, only one company primarily does each of these things, and that's MercadoLibre.

MercadoLibre's operations span from an online marketplace to digital payments to shipping logistics. With its market dominance, MercadoLibre is responsible for bringing the convenience of e-commerce to 650 million people across 18 countries.

Despite what economic conditions are like in the U.S., according to MercadoLibre's Q2 results, it is full steam ahead in Latin America. While its commerce business isn't growing as rapidly as it once was (it grew 101% YOY during last year's Q2), it still turned in a solid 23% YOY growth to $1.4 billion. On its fintech side, revenue rose to $1.2 billion at a blistering 107% growth rate.

As for profitability, MercadoLibre's earnings per share were $2.43, up from $1.37 last year.

MercadoLibre's business is executing at a high level, but the stock's valuation is well below where it has traded for the better part of a decade. At 5.8 times sales, it is more than 50% below its usual price-to-sales valuation of 12. While the market has been readjusting stock valuations, this is well below where MercadoLibre should be trading.

Despite its brisk 30% rise over the past couple of weeks, MercadoLibre remains well off its high and at a cheap valuation. If you're a believer in the long-term e-commerce rollout worldwide, MercadoLibre has to be near the top of your investment list.