The S&P 500 posted its best week of the year earlier this month, gaining more than 5%, and the index extended the gain last week with an increase of more than 1%. It's impossible to predict whether the rally will last and lead to a bull market -- or if we'll have to wait a bit longer for indexes to move into that high-growth phase.
But here's the good news. Right now, for a reasonable price, you can pick up stocks that may benefit from a pre-bull market rally and offer you top returns over the long term. These are players that generally thrive during growth markets, thanks to their track record of earnings strength or promise of explosive revenue down the road.
Two perfect examples? Technology giant Amazon (AMZN 3.43%) and gene editing specialist CRISPR Therapeutics (CRSP 0.34%). They're two stocks to buy hand over fist as markets rocket higher. Let's find out more.
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1. Amazon
Amazon is a leader in two markets growing in the double digits: e-commerce and cloud computing. And the company is making efforts that should help it continue dominating in both areas.
In e-commerce, Amazon, already known for rapid delivery speeds, is working to get even faster. The company has shifted its U.S. fulfillment model to a regional one from a national one, establishing eight centers around the country. The shorter delivery routes mean cost savings for Amazon and quicker delivery for customers (which generally prompts them to order more on Amazon).
In cloud computing, Amazon is going all in on a technology that could become a game changer for the business: artificial intelligence (AI). Amazon has increased investments in technology infrastructure to support Amazon Web Services (AWS) and has built several platforms to help businesses easily harness the power of AI. For example, through Amazon Bedrock, clients can access a variety of top foundation models and personalize them for their own use -- without having to manage infrastructure.
It's also important to remember Amazon's recent move to improve its cost structure not only helped the company recover from last year's economic difficulties -- but it should also help Amazon excel over the long term. Amazon's earnings already have started to climb again, but once the consumer and cloud clients are more confident about their budgets, earnings could truly take off.
Considering all of this, Amazon looks reasonably priced at 53 times forward earnings estimates -- down from more than 80 a couple of years ago.
2. CRISPR Therapeutics
CRISPR Therapeutics may soon become a commercial-stage company, a huge milestone in the life of a biotech. The gene editing specialist and partner Vertex Pharmaceuticals are waiting for regulatory decisions -- coming up in December and March -- on exa-cel, their candidate to treat blood disorders sickle cell disease and beta thalassemia.
This is a billion-dollar opportunity due to the lack of compelling treatment options today for these illnesses and because of exa-cel's curative potential. CRISPR Therapeutics' process of editing the genome to fix faulty genes means the resulting treatments could actually provide functional cures. That's big and clearly could attract doctors and patients.
If regulators give exa-cel a nod, this may be seen as a vote of confidence in CRISPR Therapeutics' technology -- and that's particularly positive, considering the company uses this technology across its pipeline and even has another candidate approaching the finish line. CRISPR Therapeutics is studying immuno-oncology candidate CTX110 in a phase 2 trial that may support a regulatory request. So, right now, we're in the early days of CRISPR Therapeutics' growth story.
At the same time, the biotech is trading for a much lower price than it was a couple of years ago -- when there was a lot less visibility on its programs.
In a bull market, investors are often more willing to buy innovators, growth stocks, and companies that carry a bit of risk. All of this could favor CRISPR Therapeutics -- and that's why it's an excellent stock to buy hand over fist right now.
