Does putting your money to work in the stock market seem a little frightening right now? Watching the benchmark S&P 500 index lose more than one-fifth of its value in the first 10 months of 2022 wasn't easy for anyone.
There are two important things everyday investors need to remember about bear markets like the one we're experiencing this year. First, they're relatively short-lived. Second, and most importantly, they're always followed by much longer periods of recovery.
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The stock market could keep falling for months, or the recovery may have already started. Either way, shares of these unstoppable growth stocks have an excellent chance to deliver positive gains to investors who buy them now and hold on for the long haul.
Doximity
Doximity (DOCS -2.73%) operates a social medial platform for physicians, physician assistants, and nurse practitioners. With roughly 80% of the nation's physicians on board, the social media feeds it delivers 24 hours a day contain some of the most valuable ad spaces on the internet.
Social media companies including Meta Platforms and Snap have been reporting declining ad revenues this year. You wouldn't know there's been any digital advertising pullback by looking at Doximity's results. In fact, it looks like ad buyers are eager to deepen their relationship with Doximity. Total revenue soared 29% year over year during its fiscal second quarter ended Sept. 30, 2022.
Unlike your typical social media start-up, Doximity's already generating profits, and its bottom line is rising fast. Free cash flow more than doubled year over year to $37.7 million.
Doximity trades at 45 times trailing-12-month free cash flow right now. That's a steep multiple for most businesses, but not ones that are growing as quickly as Doximity has this year. A strong performance during an otherwise difficult time for other ad-dependent businesses suggests the growth we've seen this year will accelerate once ad buyers loosen their belts again.
The Lovesac Company
Lovesac (LOVE 1.77%) is a direct-to-consumer furniture company that makes high-end beanbag chairs of the same name. These days, though, its lead product is a sectional seating solution it calls Sactionals.
A lack of ongoing customer relationships makes the traditional furniture industry a difficult one that you probably don't want to invest in. Lovesac's Sactionals are a much different animal. They rope in customers for life with highly adaptable sofas that can expand, shrink, or separate to suit a customer's changing needs.
We can tell that Lovesac's built-for-life strategy is resonating with its customers. During the company's fiscal year that ended Jan. 30, 2022, repeat customers were responsible for 41.6% of all transactions.
Lovesac looks like a smart growth stock to buy now and hold forever partly because you don't need to wait for evidence its business model can generate profits. A push to increase brand awareness and an increasing reliance on kiosks in Best Buy and Costco are pressuring profit margins at the moment. Despite the challenges, the company reported net income on a GAAP basis that worked out to around 5% of total revenue in its fiscal second quarter that ended July 31, 2022.
At recent prices, you can buy Lovesac for just 9 times trailing earnings. At this ultra-low valuation, the stock can deliver significant gains even if the business stagnates from here on out. Management recently reported comparable second-quarter sales that grew 31% year over year during what should have been a relatively difficult period for selling expensive furniture. With a highly resilient business that can keep growing in good times and bad, Lovesac looks like a terrific stock to buy now and hold forever.
