There's no denying that things are ugly right now for the investing community. Through this past weekend, the iconic Dow Jones Industrial Average, broad-based S&P 500, and technology-dependent Nasdaq Composite (^IXIC 2.96%), were all, respectively, mired in a bear market with peak-to-trough losses of between 22% and 34%.
Although the magnitude of unrealized losses during bear markets can be unnerving to tenured and new investors alike, history has shown time and again that sizable declines in the broader market are the perfect opportunity for patient investors to pounce. That's because every double-digit percentage drop in the major indexes, including the Nasdaq, has eventually been put in the rearview mirror by a bull market rally.
Best of all, you don't need to have a mountain of cash in your bank account to build wealth on Wall Street. Since most online brokerages have done away with commission fees and minimum deposit requirements, any amount of money -- even $200 -- can be the ideal amount to put to work.
If you have $200 ready to invest, which won't be needed to pay bills or cover emergencies, the following four stocks stand out as no-brainer buys with the Nasdaq plunging.
The first surefire stock to buy with $200 as the Nasdaq plummets is specialty e-commerce company Etsy (ETSY -8.44%). Although retail stocks are taking it on the chin with interest rates rising rapidly and historically high inflation threatening to reduce the purchasing power of the lowest-earning decile of workers, Etsy's unique operating model can propel its valuation significantly higher over time.
The biggest difference between Etsy and virtually every other online retail marketplace is personalization. Whereas Amazon is the volume leader, no other online retailer can offer the personalization or customization that Etsy can provide. That's because it predominantly deals with small businesses and self-proprietors. In other words, Etsy is truly in a class of its own within the online retail landscape.
What's more, Etsy hasn't been shy about reinvesting in its business -- and the rewards have been plentiful. The introduction of video ads, as well as improved search functionality, produced a 248% increase in habitual buyers over the trailing three-year period, through June 30, 2022. "Habitual buyers" are consumers who make at least six purchases totaling $200, in aggregate, over a trailing-12-month period. Growing the number of habitual buyers on the platform is what allows Etsy to increase fees on sellers.
As one final note, Etsy's five-year ad revenue growth (516%) has more than doubled its marketplace gross merchandise sales increase (253%) over the same time frame. This suggests merchants are seeing the value of Etsy's platform, and they're willing to pay a premium to get their message in front of users.
Palo Alto Networks
Another no-brainer stock to buy right now with $200 as the Nasdaq plunges is cybersecurity stock Palo Alto Networks (PANW 2.23%). Despite recessionary fears weighing on growth stocks, Palo Alto has the tools and intangibles needed to overcome these headwinds.
The beauty of cybersecurity is that it's become a basic necessity service over time. No matter how poorly the U.S. economy or stock market perform, there are always going to be hackers and robots trying to steal sensitive data. This means subscription-driven operating models tend to generate very predictable cash flow.
What makes Palo Alto special is its four-year (and counting) transformation that's seen the company move away from physical firewall products and toward higher-margin, cloud-based software-as-a-service subscriptions. Over the span of five fiscal years (the company's fiscal year ends July 31), Palo Alto's percentage of revenue derived from subscriptions has grown from less than 60% to just over 75%. The move away from physical firewall products should help the company reduce the revenue lumpiness associated with physical product replacement cycles.
Also, don't overlook Palo Alto Networks' penchant for making smart acquisitions. Bolt-on acquisitions are expanding Palo Alto's service offerings, and improving its cross-selling opportunities. It's an ideal growth stock to weather the bear market.
Green Thumb Industries
A third no-brainer stock to buy with $200 during the Nasdaq plunge that's a bit more under the radar is U.S. marijuana stock Green Thumb Industries (GTBIF 3.60%). Even though pot stocks lost their buzz due to the inability of Congress to federally legalize weed, state-level legalizations are providing more than enough impetus for multi-state operators (MSOs) like Green Thumb to thrive.
As of the beginning of September, Green Thumb had 77 operating dispensaries spanning 15 states. While many of these are high-dollar markets, what's been interesting is Green Thumb's push into limited-license states. A limited-license market purposely caps the number of dispensary licenses issued, which allows MSOs like Green Thumb the opportunity to build up their brands and garner a following without the fear of being overrun by an MSO with deeper pockets or a more established presence.
Green Thumb's success is also a function of its revenue mix. More than half of the company's sales come from beverages, vapes, dabs, edibles, pre-rolls, and various health and beauty products. Derivative pot products are pricier than dried cannabis flower, but most, importantly, produce superior margins.
What investors are getting with Green Thumb Industries is a marijuana stock that's been profitable on a generally accepted accounting principles (GAAP) basis for eight consecutive quarters (two full years). By comparison, most MSOs haven't even achieved a single quarter of GAAP profits. Taking into account that cannabis should be one of the fastest-growing industries of the decade, Green Thumb is in perfect position to generate big returns for its patient shareholders.
The fourth and final no-brainer stock to buy with $200 while the Nasdaq plunges is telecom giant Verizon Communications (VZ -0.90%). Though higher interest rates are leading Wall Street to approach telecom companies with higher debt loads more cautiously, Verizon's growth catalysts, income potential, and valuation are too tempting to pass up.
While Verizon is no longer the rapidly growing company it was decades ago, it can still move the needle in the right direction. The biggest ongoing catalyst for the company is the 5G revolution. It's been roughly a decade since telecom companies upgraded the download speed capability of their wireless infrastructure. Though upgrading this infrastructure is costing Verizon a pretty penny, it should encourage consumers and businesses to shift to 5G wireless devices and increase the amount of data they download. Data is where the juiciest margins are made within Verizon's wireless segment.
Additionally, Verizon is betting big on 5G broadband services. Thanks to recent 5G mid-band spectrum purchases, the company believes it can reach 50 million U.S. households and 14 million businesses with its 5G broadband services by the end of 2025. Though broadband is also a relatively slow-growth opportunity, it provides higher-margin bundling opportunities for Verizon that'll make its cash flow even more predictable.
Conservative investors looking for high-yield income (6.9% yield) with a meaningfully safe floor can nab shares of Verizon for a little over seven times Wall Street's forecast earnings per share for 2023.