The market downturn may not inspire you to invest. But these times actually are among the best to buy stocks. Many top companies are trading for bargain valuations. And in some cases, after a difficult year, certain stocks are starting to rebound. So, you can jump on the train before momentum truly kicks in.
Right now, in the last few trading days of the year, the market generally is calm. That offers you the opportunity to take your time -- uninterrupted by lots of news -- to study companies. You'll see how certain stocks have weathered this year's storm and get an idea of how they may perform in the long term. If you have $1,000 to invest, you can start building your path to wealth right now. And that's a great way to end the year.
Trading for a bargain
First step, check out stocks trading for a bargain. One of my favorites is Teladoc Health (TDOC 3.31%). This telemedicine leader is trading at its cheapest ever in relation to sales.
TDOC PS Ratio data by YCharts.
Investors worried this year after the company reported two non-cash goodwill impairment charges. They were linked to an acquisition back in 2020.
Since that bad news, the news from Teladoc has been much better. In the most recent quarter, the company narrowed its net loss. Revenue and visits continue to grow in the double digits. And the telemedicine market as a whole is set to grow in the double digits throughout this decade. All of this means Teladoc's long-term prospects look pretty good. And today's price looks like a steal.
Here's one more example: Costco (COST 1.01%) is trading for 32 times forward-earnings estimates. That's down from more than 45 earlier this year. At the same time, Costco continues to grow earnings.
And Costco's business model offers a big advantage. The company actually makes money before shoppers even set foot in the warehouse to shop. That's through membership fees. And the good news here is Costco's member retention rate tops 90%. So, I would expect Costco's earnings growth to continue over the long term. That makes it a bargain at today's valuation.
Teladoc and Costco aren't alone. Today's bear market offers loads of opportunities to pick up deals. A great idea is to invest a portion of your $1,000 in these sorts of stocks.
Rebounding from lows
As mentioned above, some stocks have started to rebound from this year's lows. If there is a valid reason for this movement, you should consider investing in these players too.
A perfect example is Moderna (MRNA 3.28%). This COVID-19 vaccine leader is heading for a decline this year. But the shares have been on the rise over the past three months. That's because Moderna has eased investors' biggest fear. They've worried about Moderna's sales of its coronavirus vaccine or booster in a post-pandemic world.
But Moderna recently predicted the post-pandemic market may follow in the footsteps of the flu vaccine market. That implies a multibillion-dollar global market -- and the opportunity for Moderna's product to continue generating blockbuster revenue. At the same time, Moderna's late-stage pipeline is advancing. The company predicts at least two respiratory vaccine launches in the coming two to three years.
All of this means now may be a time to catch Moderna and benefit from the next chapter of the company's growth.
Another stock on the rise over the past three months is Home Depot (HD 0.86%).
The home improvement giant's stock suffered earlier in the year even as the company continued to deliver earnings growth and a positive market outlook. Market sentiment may finally be turning around for this winning company. It's a great idea to scoop up the shares before it truly takes off.
So today, if you have $1,000, consider bargain stocks and stocks that are on the rise for a reason. These are two perfect places to invest right now. I've offered some examples, but there are plenty more out there. You may benefit in the near term. But even better, these decisions now could set you up for long-term investing success.
