The one positive point about a difficult market is it offers you fantastic bargains on stocks. But you still may hesitate to invest. You might be worried about shares dropping further. The bad news is it's pretty much impossible to buy a stock at its very lowest and sell at its very highest. The good news is you really don't have to -- and you still can win in the stock market.
Even if a stock slips further after you bought it, you're still likely to gain over the long term if you invested in a quality company. That's why it's a smart idea to pick up these players for a reasonable price -- and then sit back and wait. Now, let's check out three stocks you'll be glad you bought at today's prices.
1. Moderna
The success of Moderna's (MRNA -1.39%) blockbuster coronavirus vaccine helped the stock soar earlier in the pandemic. But these days, some investors are worried about the company's future as vaccine sales decline. Here's why they shouldn't: The vaccine represents just the beginning of Moderna's growth story.
Coronavirus vaccines won't bring in as much as they did during the worst of the pandemic. But they probably still will bring in billions. And even better, in the future, Moderna won't rely on just this one vaccine. The company aims to launch two other respiratory vaccines next year: one for flu and one for respiratory syncytial virus (RSV).
If all goes smoothly, Moderna aims to capture as much as half of the market for these three viruses by 2027. This respiratory vaccine market should be worth $30 billion by that time, and Moderna might win a $15 billion share. Importantly, Moderna predicts this could equal as much as $4 billion to $9 billion in annual free cash flow. On top of this, Moderna is advancing more than 40 programs across treatment areas. That makes the biotech's revenue opportunity even bigger.
For this, today you'll pay about 8 times forward earnings estimates for Moderna stock. That looks like a steal considering the company's long-term prospects.
2. Etsy
Etsy's (ETSY -0.22%) earnings and share price soared in the earlier days of the pandemic as people favored online shopping. The company operates a platform where artisans can sell their handmade goods -- and shoppers can buy them.
Today's economic headwinds are weighing on Etsy to some degree. But Etsy has kept most of the gains it made earlier in the health crisis. For example, Etsy marketplace gross merchandise sales were up 164% in the first quarter compared to the first quarter four years ago. And the platform's active buyers -- today at nearly 90 million -- have advanced 119% compared to that time.
Etsy also has maintained a healthy financial position considering the current economic environment. The company is profitable, and it finished the first quarter with more than $1 billion in cash. I also like the fact that Etsy's capital-light business model helps it generate loads of free cash flow. In the quarter, 90% of Etsy's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) translated into free cash flow.
Right now, Etsy shares are trading for about 20 times forward earnings estimates. Early last year, they were trading at double that. Etsy is managing the tough times well -- and the company is set to benefit from the gains it made during these recent years.
3. Teladoc Health
Teladoc Health (TDOC 0.30%) disappointed investors last year with billions of dollars in goodwill impairment charges. They were linked to the telemedicine giant's purchase of Livongo in 2020. But things are looking up for Teladoc.
First, it's important to remember that though the Livongo deal was costly, it could pay off over time. It brought Teladoc strengths in chronic care -- a big growth area for the company. More than half of Americans suffer from at least one chronic disease. And Teladoc has noted that members who sign up for more than one chronic care service usually stick around.
Second, Teladoc took action earlier this year to supercharge its path to profitability. The company cut costs by eliminating some jobs and office space. And it's investing in innovation that may drive long-term growth. For instance, it's starting to roll out an app that helps members manage their entire healthcare experience. This is key because Teladoc prides itself on offering "whole person care."
Teladoc's efforts are starting to bear fruit. The company's consolidated revenue and adjusted EBITDA beat its guidance in the first quarter. The stock trades at its lowest ever in relation to sales right now -- but if Teladoc keeps progressing, it may not stay this cheap for long.
