While no investor can predict with precision what the market will do in the coming weeks or months, the market has shown its ability to rebound from even the worst periods of volatility time and time again. In some cases, that rebound window has been mere months, while in other times it has taken years for the market to recover from bearish periods.
If you have a minimum buy-and-hold horizon of three to five years for any stocks you own, and the capital to put into the market, even the ongoing volatility that investors are currently witnessing doesn't mean you need to sit idly on the sidelines. Here are two supercharged growth stocks to consider hitting the buy button on this week and holding for at least a decade.
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX -1.02%) has revolutionized the standard of care for patients grappling with cystic fibrosis, a genetic illness that afflicts upwards of 160,000 people around the world. The cystic fibrosis treatment market is on track to hit a valuation of $32 billion by the year 2027, less than four years from now. While a cystic fibrosis diagnosis was once close to a death sentence, the reality is that many patients today are living longer, and they are feeling better while doing so.
A key factor has been the approval of CFTR modulators, a class of drugs that target the root genetic cause of cystic fibrosis. Vertex is the only company with approved CFTR modulators on the market, and it has four of them currently commercialized. The incidence of cystic fibrosis, along with the improved longevity and outcomes for cystic fibrosis patients due to the introduction of CFTR modulators, has created a large and growing addressable market. Vertex's market-leading position means that it is in an ideal place to capture the trajectory of these tailwinds.
At the same time, the broader rare disease drug market encompasses many ailments for which there are minimal or no treatment options. Vertex's current product pipeline features a range of such promising candidates in late-phase development. These include a non-opioid drug for acute pain, a potential one-time functional cure for sickle cell disease and transfusion-dependent beta thalassemia (the company is currently seeking approval for this one), and a treatment for APOL1-mediated kidney disease, which if approved would be the first-ever drug to target the underlying cause of this rare genetic illness.
Vertex is certainly coming from a place of financial strength. The trailing five-year period has seen the company grow its top and bottom lines by 193% and 58%, respectively. Its operating income has risen 558% in that five-year period. And its operating cash flow has soared 225% in that window of time. Given its path to future growth from its current line of market-dominating therapies and its robust pipeline of products, each of which target multi-billion-dollar addressable industries, now might be a wise time to consider a position in this healthcare stock.
2. Teladoc
Teladoc Health (TDOC -0.07%) hasn't recently been the star performer that investors became accustomed to in the earlier days of the pandemic, but that doesn't mean the best days of the telehealth giant are behind it. A significant factor in the stock's decline over the past year has been those significant writedowns (three impairment charges totaling about $13 billion in 2022) due to overpaying for Livongo back in 2020.
While these impairment charges have been non-cash -- essentially paper losses -- they have continued to drive Teladoc's unprofitability, and investors haven't been happy about it. Still, Teladoc has continued to grow revenue and membership levels, and is seeing significant adoption of its chronic care and teletherapy businesses. This continued trajectory was evident in Teladoc's first-quarter results, which it reported on April 26.
The company generated $629 million in revenue during the three-month period, up 11% from the year-ago one and driven by 21% revenue growth in its BetterHelp segment. Teladoc remained unprofitable for the quarter, reporting a net loss of $69 million. While that net loss was derived partly from its fourth impairment charge in the past year (in the amount of $6.6 million), that figure paled in comparison to its $6.7 billion net loss in the first quarter of 2022.
Teladoc also generated cash from operations in the amount of $13 million during the quarter, while closing out the three-month period with cash and cash equivalents on hand to the tune of $889 million. It finished the quarter with just shy of 85 million U.S. members, a 7% increase from the end of the first quarter of 2022.
As an investor in this business, I want to see Teladoc get back to profitability soon. I think the growth that it's seeing in its core business lines, its growing cash generation, and shrinking net loss can get it there. I remain a long-term shareholder. Investors that want to capitalize on the future of healthcare -- in which telehealth adoption plays a vital role -- may want to consider holding shares as well, regardless of what the market may hold in the coming months.
