For the most part, the recent downturn hasn't discriminated. Weaker stocks may have been hit the hardest, but quality ones have been harmed too. The good news is that a bull market is coming. We don't know when, but we know that bull markets always follow downturns.
Buying solid stocks with robust long-term prospects can help investors ride the next stock market run. Here are two excellent companies to consider: AstraZeneca (AZN 0.28%) and Roku (ROKU -3.05%). Both of these companies' shares are trading well below $100.
1. AstraZeneca
U.K.-based AstraZeneca has a rich and diversified lineup of drugs. The company's best-selling therapeutic area is oncology. It boasts several cancer medicines with fast-growing sales, including Tagrisso, Imfinzi, Lynparza, and Calquence. In the first half of the year, AstraZeneca's oncology revenue increased by 14% year over year to $7.1 billion.
However, all the company's other disease areas also saw improved sales, leading its total revenue to jump 43% year over year to $22.2 billion. In fairness, that was also due to AstraZeneca's acquisition of rare diseases-focused Alexion Pharmaceuticals in July 2021 in a $39 billion cash-and-stock transaction.
There is no question that the addition of Alexion improved AstraZeneca's lineup with products such as Soliris and Ultomiris, both of which treat a rare blood disease called paroxysmal nocturnal hemoglobinuria (PNH).
With and without this acquisition, AstraZeneca's lineup looks strong. The company earned U.S. approval for Tezspire, a medicine for severe asthma, in December. Tezspire has since been granted the green light in Japan and Europe. Given the inadequacy of current asthma treatments, AstraZeneca and its partner on this project, Amgen, expect Tezspire to be a major growth driver for many years to come.
AstraZeneca has many more programs in its pipeline. It expects more than a dozen regulatory submissions or decisions by the end of the year.
Some of these are brand-new products, too. Consider ALXN1840, a potential treatment for Wilson's disease, a rare genetic disorder marked by excess copper accumulation in patients' body tissues. ALXN1840 directly targets the toxic buildup of copper in these patients, and if approved, it would be the first treatment to do so. AstraZeneca expects to submit an application for ALXN1840 by year end.
Developing innovative therapies is one of the keys to success for biotech companies. Given AstraZeneca's solid track record and rich pipeline, it is more than capable of doing that consistently. That's one of the key reasons to load up on this biotech's shares at about $54 apiece, which is near its 52-week low.
2. Roku
Streaming giant Roku has encountered plenty of issues lately. Supply chain problems have increased the company's costs, while advertisers have reined in ad spending, impacting one of Roku's main sources of revenue.
These economic-related headwinds will likely persist for a while longer. Further, the near-term future will likely be marked by higher interest rates, which could harm growth stocks like Roku.
However, none of that means Roku's shares aren't worth buying. For one, there is still plenty of white space in the streaming industry. Roku ended the second quarter with 63.1 million active accounts, representing a 14% year-over-year increase. The company estimated that there are 1 billion broadband households worldwide, which means Roku has barely scratched the surface of its addressable market.
What's more, the company is arguably building a network effect. The more households are plugged into its network, the more advertisers will seek this avenue to target potential customers. Businesses are still lagging when it comes to switching to running ads on streaming platforms. Roku estimates that companies will spend only 22% of their ad business on streaming in 2022, while streaming surpassed legacy television in reach and engagement in adults aged between 18 and 49 in the first half of the year.
Roku isn't consistently profitable yet. In the second quarter, it reported a net loss per share of $0.82, compared to net earnings of $0.52 in the year-ago period. However, the vast opportunities ahead should allow it to keep growing its top line and record consistent profits eventually.
While the streaming specialist has substantially lagged the market lately, the company's shares are just about $53 -- a mere fraction of its 52-week high of $350. At these levels, Roku's stock looks like a bargain.
