2 Magnificent Growth Stocks to Buy Before the Next Bull Market

While it would be great if one or two investments could swell your portfolio overnight, few investors will experience those types of returns during the course of their career. The good news is, you don't need to find those kinds of newsworthy investments to build a portfolio that stands the test of time and compounds your returns through the years. 

Instead, by investing in a wide range of quality companies in all types of market environments, you can construct a winning portfolio that helps you move closer to your financial goals. The stock market has been rising at a rapid clip lately. While it may be too soon to say if the next prolonged bull market is here, when the next one does appear, investors who stayed with quality stocks can be poised for impressive returns. 

Here are two such quality businesses to consider buying as you add to your basket of stocks this month. 

1. Pinterest

Pinterest (PINS 21.02%) is a platform designed to provide visual inspiration to users on a range of subjects, a clever disguise for its true purpose as a full-service ad platform. Brands of all sizes across a range of industries look at the platform as a means of converting users into potential customers, as many of the search results are actually image and video ads for related products and services. 

The clever aspect of Pinterest's platform is that it doesn't look like an advertising business. With a layout that can lead users to scroll for minutes to hours, it's not hard to see how businesses would be willing to pay for ad space to access the company's monthly active user base of 463 million individuals and counting. Pinterest is increasingly leveraging demand for video content to draw more users and convert those users into buyers.

Currently, more than 10% of Pinterest's user engagement is derived from video content posted on the platform, while upward of 30% of revenue is derived from those video "pins." Management said the platform's quantity of video content rose 40% in the first quarter of 2023 compared to the prior quarter. Over the three-month period, total revenue rose 5% year over year to $603 million, while monthly active users grew by a solid 7%.

Gen Z users -- individuals born between 1997 and 2012 -- are now Pinterest's fastest-growing cohort of users. While overall user growth was in the single digits, management noted on the first-quarter earnings call that its Gen Z segment of users grew double digits in the three-month period.

Why does this matter? Well, Gen Z shoppers are more digital-centric than previous generations, and much of their online usage and shopping habits revolve around social media platforms. According to the results of a recent survey by Jungle Scout, more than one-quarter of Gen Z respondents reported shopping online at least once a day.

Ad spending is down on the whole right now. Still, Pinterest's shopping ad revenue rose a whopping 40% in the first quarter of 2023 compared to the same period in 2022. Pinterest's continued expansion of its user base and its growing monetization of its platform in this environment looks like a good sign for its future and that of its long-term shareholders.   

2. Vertex Pharmaceuticals 

Vertex Pharmaceuticals (VRTX 2.38%) has built a thriving business around the power of its cystic fibrosis drug franchise, a powerhouse of products that raked in revenue of approximately $9 billion in 2022. Over the trailing 12 months, the company pulled in profits north of $3 billion.  

The company remains the singular leader in the cystic fibrosis drug space, as it's the only one with drugs on the market that treat the underlying genetic factors that cause someone to have the disease. These drugs are called CFTR modulators. And patent protection on its top-selling drug, Trikafta (this drug alone accumulated revenue of $7.7 billion in 2022), doesn't expire until 2037.

Meanwhile, Vertex Pharmaceuticals continues to expand its potential sources of future revenue and profits with a promising pipeline that not only includes cystic fibrosis drug candidates, but also taps into other areas of the rare disease drug market. One drug that could be commercialized as soon as next year is exa-cel, which is designed to be a one-time functional cure for two rare blood disorders and is currently under review by the U.S. Food and Drug Administration.  

Vertex is also working on a non-opioid drug to treat acute pain ailments, tapping into a market opportunity that management estimates could be worth as much as $4 billion in the U.S. alone. This drug candidate has already been granted fast-track and breakthrough therapy designations by the FDA.

The third drug candidate that could make it to market in the next few years is a triple-combination therapy for cystic fibrosis.

Management said that this candidate is designed to not only be a new treatment option for the existing CF patient population, but also for patients who have taken Vertex's CFTR modulators in the past and had to stop for some reason, such as an adverse reaction. The patient population that has discontinued use of one of its drugs represents a base of around 6,000 individuals.

With its profitable portfolio and abundant upcoming commercial opportunities in both the CF and other rare disease drug markets, this solid healthcare stock looks like an intriguing buying opportunity for long-term investors.