It feels great to start off the new year on the right foot. This often comes in the form of New Year's resolutions. But there's another way to set yourself off on a prosperous path in 2023. And that's by investing in bargain stocks that have what it takes to grow your portfolio over time.
We know tough markets and economic downturns eventually lead to better days. So, an investment now could pay off in a major way down the road. Let's check out three of today's best long-term opportunities.
1. Etsy
Etsy (ETSY +4.84%) is an online marketplace for handmade goods. Sellers set up shop on the platform, and buyers can literally go from shop to shop to purchase a wide variety of items -- from jewelry to toys. The pandemic offered the e-commerce company a significant boost. In the earlier stages of the crisis, Etsy's revenue soared in the triple digits.
But here's some great news. The company kept much of those gains. So today, it's quite a bit bigger than it was just three years ago. In the third quarter, Etsy marketplace's gross merchandise sales (GMS) reached $2.6 billion. That's compared to $1 billion in the same quarter of 2019.
How has Etsy managed that? Through the growth of new buyers and the loyalty of habitual buyers. Customers appreciate the quality and diversity of products in Etsy's shops, and the company has invested in elements that make it easier to search for products or pinpoint delivery times.
NYSE: ETSY
Key Data Points
Today, Etsy shares trade for 31 times forward-earnings estimates. That's down from more than 40 a year ago. Considering Etsy's ongoing strength and growth in those who shop there, valuation should climb from here.
2. Teladoc Health
Teladoc Health (TDOC +2.35%) sank 74% last year. Why such a drop? The telemedicine leader reported two billion-dollar, non-cash goodwill-impairment charges. This implied it paid too much for an acquisition back in 2020. Investors worried about the company's ability to reach profitability, especially in a market with growing competition.
NYSE: TDOC
Key Data Points
I think fears have been overblown. First, let's talk about the idea of competition. Teladoc is a leader, serving more than half of Fortune 500 companies. And the company has been able to keep those customers and add more for one big reason: its focus on "whole-person" care. That includes every aspect of physical and mental health. So, I'm confident Teladoc can stay ahead.
As for profitability, the company has offered us reasons to be optimistic. In the latest earnings report, its net loss narrowed. Teladoc also said in a recent presentation that it's improved margins by 400 basis points over the past three years.
Today, Teladoc shares trade for their lowest ever in relation to sales.
TDOC PS Ratio data by YCharts.
Teladoc continues to maintain leadership in this growing market and progress toward profitability. That means the share price may not remain at these bargain basement levels for long.
3. Tesla
In just a few years, Tesla (TSLA +0.97%) went from huge gains to big losses when it comes to stock market performance. But there's reason to believe this electric vehicle (EV) giant will soar again. That's because the company's growth is going strong in spite of economic headwinds.
NASDAQ: TSLA
Key Data Points
Last year, Tesla delivered 1.31 million vehicles. That's a 40% increase over the previous year. This is in last year's environment of higher costs, foreign exchange headwinds, and ramp-ups at new Tesla factories. So, in better days, it looks like Tesla is on the right track to reach its goal: an average of 50% annual growth in vehicle deliveries.
In the most recent quarter, Tesla's revenue, operating profit, and free cash flow reached record levels. The company's operating margin is among the highest in the industry at more than 17%. And Tesla continues to lead the market thanks to the quality of its vehicles and its brand strength.
Now, let's look at valuation. The stock trades at 28 times forward-earnings estimates. That's compared to more than 100 just a year ago. Considering Tesla's current earnings and future prospects, this is one of the best deals around right now.
So, buying Tesla stock -- and Etsy and Teladoc -- is a way to start the year right -- and benefit over the long haul.
