What better way to start a year than with a focus on innovation? I'm talking about companies with innovative technologies that are improving (or aim to improve) how things are done. You'll find them in healthcare, technology -- and across a variety of industries. Some of these stocks already have delivered big but have room to run. In other cases, they've stagnated, but have what it takes to roar higher.
As you begin your investing year, it's a great idea to add a few of these exciting players to your portfolio. If you're a cautious investor, you may try a small position in one or two; if you're an aggressive investor, you might consider bigger positions. Let's check out five innovative stocks that could score a win for your portfolio as early as this year.
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1. CRISPR Therapeutics
CRISPR Therapeutics (CRSP 0.34%) just reached a major milestone, winning approval of its very first product: Casgevy, for blood disorders. Casgevy's regulatory nod also marked the first worldwide for a therapy based on CRISPR gene editing.
The technique, by cutting DNA at a certain location and allowing a repair process to take place, fixes genes responsible for certain diseases. The exciting thing about this is it produces functional cures, greatly improving the lives of patients. So Casgevy, approved for sickle cell disease, can be seen as a game changer -- and CRISPR Therapeutics' pipeline, filled with other gene-editing candidates, may produce more game changers down the road.
This potential, and the fact that Casgevy revenue should start to roll in this year, should make CRISPR Therapeutics an innovator that could climb in the coming months and beyond.
2. Ginkgo Bioworks
Ginkgo Bioworks (DNA 10.60%) can be seen as a key behind-the-scenes player in industries including pharmaceuticals, materials, and agriculture. It engineers organisms that companies in these industries use to develop better products.
The organism specialist already has ongoing collaborations with many major partners. Most recently it signed a deal for the development of RNA therapeutics with big pharma Pfizer; the collaboration could bring Gingko as much as $331 million. And the company's active projects are on the rise, gaining 36% year over year in the third quarter.
Gingko's cell engineering revenue climbed by double-digit percentages in the most recent quarter. And though the company isn't yet profitable, its $1 billion in cash offers it a multiyear runway to help it get there.
All of this means that Ginkgo's shares, currently trading at less than $2 each, represent an opportunity to get in on a promising player.
3. Alphabet
Alphabet's (GOOG 9.96%) (GOOGL 10.22%) stock advanced last year, but this top technology player has what it takes to continue delivering gains. As parent of search-engine giant Google, the company attracts a flock of advertisers eager to reach their target audiences -- you and me.
When the economy slowed, some investors worried that tight ad budgets would hurt Alphabet. But even as advertising briefly dipped, the company managed to continue growing overall revenue.
Why should we be confident about continued revenue growth? First, Google holds 91% of the search market and has become part of our search routines; we all know it's hard to change a routine. Second, Alphabet, as part of its investment in artificial intelligence (AI), recently released its most powerful AI model ever. It's testing Gemini in Google search right now, with the goal of making search better and better.
All of this means that Alphabet looks cheap at only 24 times forward earnings estimates, and the stock has plenty of room to run.
4. Teladoc Health
Teladoc Health (TDOC -2.40%) had it rough over the past couple of years. Investors worried that the telemedicine giant, in spite of revenue gains, was struggling to reach profitability. Billions of dollars in non-cash goodwill impairment charges linked to an acquisition didn't help matters.
But Teladoc took charge of the situation earlier this year, with the goal of balancing its quest for revenue growth with the quest for profitability. The plan has been bearing fruit, with the company meeting or beating expectations in recent quarters.
Now, Teladoc is taking things one step further by conducting an operational review of its entire business. The goal is to focus investments and attention on its priority of whole-person care. In its recent earnings report, the company suggested that it hopes this move will help share-price performance too.
Today, trading close to its lowest multiple ever in relation to sales, Teladoc makes a top recovery-story buy.
TDOC PS Ratio data by YCharts.
5. Tesla
Tesla's (TSLA -1.11%) stock soared last year, but this electric vehicle (EV) leader could continue to gain in 2024 -- and most importantly, over the long run.
The company has reached an inflection point that may weigh on near-term growth; for example, it's making investments in AI and in efforts to reduce costs over the long haul. But Tesla's goal to be a "cost leader" will help maximize earnings growth over the long term, and that's very positive news.
At the same time, Tesla managed to grow energy generation and storage revenue, as well as services revenue, by double-digit percentages in the most recent quarter. And the company has increased its cash position to more than $26 billion -- a huge plus for a growing innovator, especially in a high-interest-rate environment. Tesla also remains profitable and generates strong levels of free cash flow.
All of this means that the EV giant could continue to score a win for your portfolio -- possibly as soon as this year.
