When offering up investment advice, successful fund manager Peter Lynch pointed out: "Behind every stock, there is a company. Find out what it's doing." The market tends to focus on how news affects stocks and that led to a lot of volatility over the last year. Many companies across a range of sectors got caught up in this volatility. But when you look past these (sometimes inexplicable) share price movements, you see there are some incredible companies with quality underlying businesses still producing well.
It's those companies we will be focusing on today.
If you have $1,500 you don't need to pay down short-term debt, balance your monthly budget, or bolster your emergency fund, you might want to put it toward a long-term investment in stocks right now. Here are two companies with compelling businesses and growth stories behind them that are too good to overlook.
1. Teladoc Health
Teladoc Health (TDOC 3.31%) sparked the interest of many investors in the early days of the pandemic when the telehealth industry saw supercharged adoption by both consumers and medical providers. Now, with much of the world returning to a new normal -- not to mention the broader economic and market volatility that has afflicted growth stocks -- some investors seem to have lost interest in the healthcare giant. While the stock is trading up by about 6.6% from the start of 2023, it's still trading down by roughly 65% from its share price position just one year ago.
The continued pressure on Teladoc's price is, in part, tied to the broader market's concern about growth stocks in a rising interest rate environment. But it also seems related to two key factors: Concerns about the relevancy of its business in a post-pandemic landscape, and its lack of profitability.
Regarding the first concern, I would note that Teladoc remains one of the largest telehealth companies in the world by revenue, and operates in a space that continues to grow steadily. The telehealth market is on track to reach a global valuation of $455 billion by 2030. This market is currently valued at about $101 billion.
While there are certainly other players in the telehealth space and new competitors entering the market, Teladoc's early mover advantage and its investments in a diverse selection of quality virtual care products help to differentiate it from the pack. From chronic care management to general medical concerns to virtual therapy, Teladoc covers it all. Its virtual therapy segment BetterHelp raked in revenue of $1 billion in 2022 alone, up 41% from the prior year. The company also brought in full-year revenue of $2.4 billion. That total is up by around 340% on a three-year basis.
As a shareholder, I understand why Teladoc's lack of profitability concerned some investors. However, it's important to look at the catalysts behind Teladoc's bottom line. In 2022, $13.4 billion of the $13.7 billion in net losses the company reported were attributable entirely to non-cash impairment charges related to its Livongo acquisition. These are one-time charges and aren't the same as tangible cash losses.
I want to see Teladoc return to profitability, but the story beyond those recent bottom-line figures, and the company's continued strides in building out core business segments, point to growth ahead. For long-term investors with the risk appetite to put $1,500 into growth stocks right now (that amount will buy just over 61 shares), Teladoc may be one to consider.
2. Airbnb
Airbnb (ABNB 2.77%) remains a stand-out example of resilience within a travel industry plagued with volatility and uncertainty, particularly as recession fears still loom. And while a recession could certainly affect Airbnb's business in the short run, the foundation that the company's laying now as it caters to dual sides of the rapidly evolving travel economy bodes well for its ability to withstand such a downturn.
This dual-sided element is one of the aspects of Airbnb's business model I find most compelling. Airbnb's platform is geared toward people looking to replace an income or make a secondary income via hosting, as well as to every kind of traveler -- from business travelers to leisure travelers to the increasingly prevalent, newer type of traveler who is blending both. Beyond the broad travel industry tailwinds driving hosts and travelers to Airbnb's platform, a difficult economic landscape can bring tailwinds of its own.
For example, Airbnb management noted that a tough macro environment is actually driving more people to look to hosting as a means of earning cash. This concept is borne out by the fact that listings reached a record high at the end of 2022: 6.6 million active listings, which was up 16% compared to the end of 2021. Even if a recession hits, leisure travel is far from the only catalyst driving the momentum of stays on Airbnb's platform.
At the end of 2022, 21% of stays booked on Airbnb were for 28 days or more, while 46% were for stays of at least seven days. Nights and experiences booked in 2022 were up 31% year over year, and 20% on a three-year clip. The multi-faceted nature of Airbnb's platform and the diverse range of hosts and travel needs it caters to give it durability that other travel stocks may lack in the event of a recession. For investors looking at a minimum buy-and-hold period of three to five years, it may be a wise time to put $1,500 into this growth stock (that amount will buy just under 12 shares), as it appears to have plenty of room left to run over the next decade and well beyond.
