2016 is off to a rough start. All three of the major indices are trading lower, with the Nasdaq Composite getting hit particularly hard -- as of 1:00PM EST, the Nasdaq is down by 2.44%.
As Foolish investors know, crazy markets often are an opportunity to pick up shares in great stocks that are suddenly trading at bargain prices. With that in mind, here are three companies on my shopping list that I would be happy to buy if the market were to crash.
1. Regeneron Pharmaceuticals (REGN 3.11%)
Regeneron Pharmaceuticals is on a roll. Eylea, the company's best selling treatment for age-related macular degeneration and diabetic macular edema, continues to grow like gangbusters as it gobbles up market share. Global sales of Eylea rose by 53% in the last quarter to $1.1 billion. With the drug grabbing several label expansions during 2015 I think the odds are good that its torrid growth rate will continue in the year ahead.
While Eylea alone could power Regeneron Pharmaceuticals' sales and profits higher, the company's newly-launched cholesterol-busting drug Praluent should really turbo charge its growth rate in the years ahead. Praluent is now available for sale in both the U.S. and European Union, and its current addressable market appears to be huge. Regeneron believes that Praluent could be a treatment option for more than 8 million Americans even just with its current labeling, which could be expanded down the line. With a wholesale price of more than $14,000 annually per patient, it wouldn't surprise me to see Praluent reach to pass the billion dollar sales mark in its first year on the market.
With Eylea and Praluent poised to shoot Regeneron Pharmaceuticals' revenue and profits higher, I would be a happy buyer of this high-quality company if its shares were to suddenly go on sale.
2. TripAdvisor (TRIP 4.49%)
Odds are good that you visited one of TripAdvisor's websites before you booked your last vacation. The company's collection of 250 million reviews on 5.3 million unique accommodations, restaurants, and attractions make it the go-to site for all things travel. This huge library of reviews attracts more than 375 million unique visitors to its site each month. Meanwhile, with the company investing heavily to add more restaurants, vacation rentals, and local attractions to its network, that number is bound to grow.
With all of those eyeballs flocking to the company's websites each month it should have no problem growing its revenue in the years ahead. TripAdvisor generated $1.2 billion of sales in 2014, which sounds like a big number but is still just a tiny fraction of the $1.3 trillion that is spent on travel each year. That massive market size provides this company with an enormous growth runway.
TripAdvisor shares are currently trading at a lofty 52 times trailing earnings, but market crashes tend to send high-flying growth stocks into a tailspin. If that were to happen, I would happily add to my position.
3. Gilead Sciences (GILD 1.84%)
Gilead Sciences stock is the Rodney Dangerfield of the biotech sector. Despite being the largest and most profitable biotech company in the world its shares get no respect. Shares are currently trading hands for less than 9 times trailing and forward earnings estimates which makes it one of the cheapest stocks in the industry. What gives?
Investors are worried that incoming competition for its Hepatitis C franchise might cause its top line to fall in 2016. While it's possible that competition could considerably slow its growth rate, my inclination is that those fears are overblown.
Investors should also remember that Gilead Sciences has a strong pipeline and top-notch management team in place. Even if competition does take a big bite out of its market share, the company will still have billions in free cash flow to put to work. The company could use that money to acquire other promising drugmakers, repurchase its shares, or simply increase its newly-initiated dividend, giving investors today multiple ways to win. If the market were to make shares of this already cheap biotech even cheaper, then I'd happily add to my position.