While investors are in the trenches of a volatile stock market right now, that doesn't mean things will stay this way forever. Bear market periods are inevitable and have come and gone throughout the history of the stock market. Sometimes, these difficult periods have lasted for months; others, for years.
Regardless of when the road ahead finally smooths out for investors, those who continued to snap up shares of wonderful companies at bargain prices can be well positioned for a future market recovery. Here are two such great stocks to consider buying this year.
1. Airbnb
Airbnb (ABNB 1.03%) is increasingly proving to investors that leisure travel is just one piece of the pie when it comes to building out its business over the long term. While recovery in cross-border, as well as both urban and non-urban travel continue to carve Airbnb's growth trajectory, management has reiterated that the developments within the broader economy that make it easier than ever for consumers to live and work in different places for prolonged periods of time are also notable tailwinds they can continue to build upon in the years ahead.
It makes sense. In an age where more and more people are working remotely on a part-time or full-time basis, are joining the gig economy, or other myriad aspects of the broader digital economy exist, the ability to enjoy freedom of movement rather than the need to be tied down to a specific location is a golden opportunity that many are taking advantage of.
And if you're going to be traveling for weeks, if not months, or even just moving from your home city to stay in a single location for an extended period, most consumers are far less likely to choose a hotel and instead opt for apartment-style living.
While the growth of the digital economy is still in its relatively early stages, Airbnb is well positioned to continue capturing the dollar spend that is sure to arise from an increasingly distributed workforce and consumers on the move. As it is, more than 50% of all bookings completed on Airbnb in the second quarter of 2022 were stays of seven days or more, while long-term stays of 28 days or more comprised approximately 20% of all bookings in both the second and third quarters of the year.
And the company is in a great position financially. The third quarter of 2022 saw the company report record revenue and profits. It also generated a free cash flow of about $970 million in the quarter, not to mention $3.3 billion in free cash flow in the 12-month window leading up to the end of the third quarter. Given the variety of catalysts for growth that Airbnb can draw from in the years ahead, from broader travel spending to new swaths of consumers capitalizing on the work-and-travel phenomenon, there's a lot for investors to like about this stock over the long term.
2. Teladoc
Teladoc Health (TDOC 2.46%) has taken a beating over the last year, with shares trading down about 60% from where the stock was a year ago. However, the stock has jumped by roughly 40% since the beginning of 2023. The extreme volatility that Teladoc investors have witnessed in recent months comes down to a few key concerns. For one, investors haven't been happy about Teladoc's continued unprofitability, which was only worsened when it reported roughly $10 billion of impairment charges in the first half of 2022 to write off its prior acquisition of Livongo. Also, there seems to be doubt among some investors whether the use case for Teladoc's platform holds true in a post-pandemic era.
Regarding the first concern, the third quarter of the year saw Teladoc drastically reduce its net losses, with no additional impairment charges, while pulling in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $152 million for the three-month period. While it's true that the company probably overpaid when it bought Livongo back in 2020, the addition of this platform is key to its long-term vision of providing comprehensive virtual care solutions, including for a wide range of chronic health conditions.
It's been estimated that one in three adults in the U.S. have numerous chronic health issues, with these health concerns accounting for as much as 90% of all healthcare spend nationally. In the third quarter of 2022, Teladoc saw its cohort of members using one or more of its chronic care solutions jumped 9% from the year-ago period.
Regarding Teladoc's utility in a post-pandemic world, the rise of virtual care solutions and adoption of these services was growing before the pandemic. The need for quality virtual healthcare will only increase in the years to come, as the combination of an aging population, an under-supply of healthcare workers, as well as the ease and efficiency of virtual solutions can continue to drive adoption forward.
For Teladoc, which remains one of the leading telehealth providers in the U.S., the potential market in which it operates -- valued at $35 billion as of 2022 -- is largely at its disposal to continue its land grab in. The future is digital, and healthcare will remain a key component of that reality. As Teladoc expands its market share and continues to build upon the power of its full-service virtual care business, which is seeing tremendous growth in its chronic care, mental healthcare, and primary care segments, long-term shareholders certainly stand to benefit.
