Warren Buffett famously told investors to be "greedy when others are fearful." There's certainly plenty of fear in the market right now as rising interest rates, geopolitical instability, and bank failures continuously rattle the markets -- but it can also be tough to get greedy when so many companies are exposed to those macroeconomic headwinds.
In this volatile market, I'd suggest looking for financially stable market leaders that are resistant to the macro risks and undervalued relative to their long-term growth potential. Here are three no-brainer buys that check all of those boxes: Coupang (CPNG -0.93%), Nintendo (NTDOY -0.08%), and Bumble (BMBL 1.73%).
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1. Coupang
Coupang, one of the largest e-commerce companies in South Korea, served 18.1 million active customers at the end of 2022. Eleven million of those customers were also locked into its Prime-like Wow subscriptions, which provide better delivery options, free returns, streaming videos, food and grocery deliveries, and other exclusive perks for a monthly fee.
Coupang's stock currently trades more than 60% below its IPO price and is valued at less than two times this year's sales. Its valuation plummeted as investors fretted over its slowing growth in a post-pandemic market and its lack of profits. However, Coupang made a lot of progress toward stabilizing its business over the past few quarters.
Its revenue only rose 12% to $20.6 billion in 2022, compared to its 54% growth in 2021, but it narrowed its net loss from $1.54 billion to $92 million. It also stayed profitable by generally accepted accounting principles (GAAP) over the past two quarters. That progress -- which Coupang attributes to its improving scale, the expansion of its higher-margin third-party marketplace, and cost-cutting measures -- suggests its business is sustainable.
It still faces some near-term headwinds, but analysts expect its revenue to rise 17% to $24.1 billion this year with a net profit of $482 million. If its revenue growth accelerates again as its profits rise, the bulls could quickly rush back and propel this forgotten e-commerce stock back above its IPO price.
2. Nintendo
The Japanese gaming giant Nintendo has sold 122.4 million Switch consoles (including the Lite and OLED versions) since its introduction nearly six years ago. Its sales remained robust throughout the pandemic as people stayed at home and played more games, but its growth quickly cooled off as those tailwinds dissipated.
Nintendo's revenue declined 4% in fiscal 2022 (which ended last March), decelerating from its 34% growth in fiscal 2021, and it's bracing for a 6% decline in fiscal 2023. It also expects its net profit to plunge 23% this year.
That slowdown, which was exacerbated by supply chain constraints and game delays, convinced many investors that Nintendo's next growth cycle wouldn't start until it launched a proper successor to the aging Switch. Nintendo still hasn't said much about that long-awaited console, but the latest rumors suggest it might arrive in late 2023.
Nintendo's growth could accelerate significantly in fiscal 2024 if that happens. But even without a new console, it could keep consumers interested with the recent opening of Super Nintendo Land at Universal Studios Hollywood, the new Super Mario Bros. movie in April, and the long-awaited launch of The Legend of Zelda: Tears of the Kingdom in May.
Nintendo's upside potential might seem limited right now, but it's a bargain at 15 times forward earnings and it pays a forward yield of 3.3%. That low valuation and high yield could make it a stable place to park your cash in this volatile market.
3. Bumble
Bumble carved out a niche in the crowded online dating market with its namesake app, which lets women make the first move. It also owns Badoo, an older dating app that is more popular in Europe and Latin America, and the French dating app Fruitz.
Bumble, like its larger rival Match (MTCH 1.05%), suffered a slowdown during the pandemic as more people stayed at home. But it continued to grow as the lockdowns ended, even as its users grappled with inflation and other macro headwinds.
Its revenue rose 19% to $904 million in 2022, which decelerated from its 32% growth in 2021, and analysts expect 18% growth in 2023. Match's revenue only increased by 7% in 2022, and analysts expect another 7% growth this year.
Bumble is growing faster than Match because its namesake app, which hosted 2.2 million paying users and accounted for most of its revenue in 2022, continues to attract more female users. Bumble's BFF feature for platonic friendships is also gaining traction among male users and potentially forming the foundations of a more diversified social networking platform.
Bumble's profitability also continues to improve. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 10% to $227 million in 2022, and analysts expect that figure to increase 22% to $276 million this year. Bumble trades at just 9 times that estimate -- which makes it an undervalued play on the online dating market.
