Buying These 2 Remarkable Growth Stocks in Any Market Could Be a Genius Move

The stock market has had plenty of great trading days in 2023, but the volatility of the 2022 stock market has persisted. Even as promising economic data continues to appear, fears about the potential of a global recession haven't totally receded. 

With that in mind, choosing businesses that can hold up against the whims of the market and continue to grow over the long term is more important than ever. Here are two such stocks that look like intriguing buys for investors with a buy-and-hold strategy and cash to put into the market right now. 

1. Chewy

Chewy (CHWY 2.99%) is an online pet store with thousands of products ranging from bedding to toys to food. The business of a pet store isn't new in and of itself, but Chewy's unique approach to the modern iteration of this model is driving consistent revenue growth and profits. 

For one, Chewy is a 100% online business. It threw the cost-heavy concept of a physical pet store out the window. While Chewy does incur overhead costs through its shipping and fulfillment processes, there are a few benefits to the way that this company gets orders to its customers. In managing its own fulfillment network, it doesn't have to contend with the unpredictability that reliance on a third-party fulfillment entity can create. 

Chewy has more than a dozen fulfillment centers across the U.S. Four of those centers are automated and the company is on track to open a fifth next year. Not only do these automated locations expand the fulfillment capabilities of each center -- which means that customers can get their orders faster -- but they also slash the overhead costs associated with fulfillment.  

Another aspect of Chewy's business model that I've always liked is its diversification. Beyond supplies for household pets, Chewy also sells products for larger animals like horses and livestock. The company runs its own online pet pharmacy where pet owners can access both standardized and compounded drugs, plus a telehealth service that allows pet owners to video call or text with a licensed veterinarian. 

Chewy launched its own non-prescription line of pet supplements last year, entering a subsector of the pet wellness market that alone is valued in the billions of dollars. The company is in the process of launching into its first international market, Canada, at the time of this writing. And Chewy is working on launching a new sponsored ad business, where pet brands can pay to advertise to the millions of customers shopping on its e-commerce store.  

Chewy raked in net sales of $2.8 billion with profits of $19 million in the most recent quarter. Net sales per active customer (NSPAC) hit $530, a 15% increase from the same quarter last year. Importantly, 76% of Chewy's total net sales were generated by its autoship program, which enables customers to get recurring deliveries of their favorite products. In other words, more than three-quarters of its top line is attributable to recurring sales. This indicates that once a customer shops on Chewy, they're more likely than not to keep doing so again and again.  

Pet spending may fluctuate, but it's arguably not as subject to volatility as other forms of consumer spending given this is an essential expense for many households. Chewy stands to benefit from the growth of the pet care market over the long run, and its first international expansion may be just the beginning. 

2. Vertex Pharmaceuticals 

Vertex Pharmaceuticals (VRTX -0.06%) has long dominated an incredibly lucrative and growing industry, but that may be just the tip of the iceberg for this business's long-term potential. Vertex Pharmaceuticals is the market leader in the cystic fibrosis therapeutics space, an industry on track to touch a valuation of more than $31 billion by 2027.  

As a first-to-market leader for what had been a vastly underserved area of the rare disease drug market, Vertex Pharmaceuticals has maintained a chokehold on the cystic fibrosis drug space for over a decade now. To date, it is the only company with products on the market that treat the underlying cause of the genetic illness. With four approved cystic fibrosis medications (and counting) that serve this function in its arsenal, Vertex has accumulated a distinguished track record of revenue, profits, and cash. 

In the most recent quarter, Vertex reported revenue of $2.5 billion, a 14% increase from the prior year. That revenue figure represented an eye-popping 67% increase on a three-year basis. Profits for the three-month period totaled $916 million, up 13% from one year ago, while the company closed the quarter with a stash of cash and investments to the tune of about $13 billion.

Vertex continues to seek expanded approvals for its portfolio of cystic fibrosis drugs. For example, in May, the U.S. Food and Drug Administration (FDA) approved one of its products, Kalydeco, for patients as young as one month. The company is currently working on a new cystic fibrosis drug with Moderna that would target the more than 5,000 patients who can't take its existing portfolio of drugs. It has a new triple-combination therapy for cystic fibrosis in late-stage trials, too.

Beyond cystic fibrosis, the rare disease market could be Vertex Pharmaceuticals' oyster. The company has a drug candidate called VX-548 in phase 3 trials that is specifically designed to target a range of acute pain disorders. Notably, VX-548 is a non-opioid and the FDA has already approved it for "breakthrough therapy" and "fast track" designations for moderate to severe acute pain. Management identifies this addressable market as a multibillion-dollar opportunity. VX-548 is also being tested in people with diabetic peripheral neuropathy, another underserved space that could represent billions in revenue for the business if approved.  

Another promising candidate in Vertex Pharmaceuticals' pipeline is VX-880, a stem-cell-based treatment for patients with type 1 diabetes. The goal is to develop a functional cure for type 1 diabetes, an achievement that, despite many advancements in treating this disease, would be the first of its kind. Bear in mind that there are more than 2.5 million individuals with type 1 diabetes in the U.S. and Europe alone.  

This profitable and steadily growing business is a prime example of a healthcare stock with a compelling growth story and tremendous untapped potential to explore. Investors may want to scoop up at least a few shares in the near future.