"The investor's chief problem -- and his worst enemy -- is likely to be himself. In the end, how your investments behave is much less important than how you behave."
Value investing pioneer Benjamin Graham's words ring true in every market environment, but especially in the highly volatile one that investors have been contending with over the past year. Avoiding emotional investing, or trying to time the market, isn't always easy. But giving in to either of those inclinations can significantly derail your long-term investing goals.
If you instead focus on buying great businesses and adding to your holdings in them in a wide variety of market landscapes, you can boost your chances of experiencing prolonged, compounded returns with time in the next bull market and beyond.
With that in mind, here are two such stocks to buy right now.
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals' (VRTX 1.43%) stock price is up nearly 19% over the trailing 12 months, which is no small feat given the S&P 500's broader 11% decline during that same period. There are a few catalysts behind this. For one, the healthcare industry as a whole tends to be more resilient and non-cyclical when compared with other economic sectors. This is because the products and services that companies operating in this space provide see consistent demand regardless of what's happening with the broader economy.
The strength of Vertex Pharmaceuticals' underlying business has also been a catalyst. The company controls a leading share of the cystic fibrosis therapeutics market, as it is the only entity with approved drugs that treat the underlying cause of this genetic ailment. Vertex's first-mover and durable advantage in this space enabled it to amass considerable revenue and profits. 2022 alone saw Vertex Pharmaceuticals report revenue of $9 billion, earnings of $3.3 billion. It closed out the year with cash and investments totaling $11 billion.
Looking ahead, Vertex has drug candidates going through the approval process that target ailments for which there are minimal (or in some cases no) effective treatment options, this is a business setting its sights on dominating far more than its current slice of the multibillion-dollar rare disease drug market. One of the most promising of these candidates is its rare blood disorder therapy called exa-cel, which the company developed with CRISPR Therapeutics.
Vertex just announced that it had completed regulatory submissions in the U.S. for exa-cel, while its regulatory packages were completed in the E.U. and U.K. as of the end of 2022. Importantly, Vertex is seeking priority review of its regulatory package for exa-cel from the U.S. Food and Drug Administration, which, if approved, would move the process down to eight months from start to finish instead of one year.
With a portfolio of profitable, market-leading drugs and a promising pipeline of candidates with vast, untapped addressable markets, there is a buying proposition for this healthcare stock that is far too good to not explore further.
2. Airbnb
Airbnb (ABNB 1.03%) faced a somewhat contradictory operating environment over the last year. Broadly speaking, people are still spending money on travel, even as worries about a recession linger. That has benefited a wide range of companies with exposure to the travel industry. Even so, Airbnb's growth story is operating at an even faster pace and raking in cash and profits that differentiate it from the pack.
Whether you want to stay in a castle perched above a Tuscan vineyard, a treehouse in Indonesia, or a farm in the Australian Outback, few companies offer the diversity of stays and experiences that Airbnb does, all collated on a single platform. The fact that Airbnb draws everyone from long-term travelers to business travelers to traditional leisure travelers to the growing cohorts of digital nomads means that the company has exposure to a wide range of travel spending, a notable green flag for its ability to weather any turbulence that a recession could bring about in the near-term.
Airbnb's financials bring this point home. At the end of 2022, 21% of all bookings on Airbnb were long-term stays (bookings of at least 28 days). Nearly half (46%) of all stays booked on the platform as of the end of 2022 were a minimum of seven days or longer. The full-year 2022 saw the company rake in revenue of $8.4 billion while nights and experiences booked hit just shy of 394 million, representing growth rates of 75% and 20% from 2019, the year prior to the pandemic.
This is a stock with plenty of growth opportunities left to explore, both from the tailwinds driving the overall travel industry to the rise of more flexible kinds of travel in a rising digital economy fueled by remote work. For investors, that can also create an opportunity that one may be hard-pressed to overlook.
