A bear market will not steer you away from buying stocks. Now may be the best time to load up on some heavily discounted growth stocks as the opportunities that exist today may not last long. A recovery is inevitable, and trying to time the market or wait for that perfect opportunity can cost you completely.
This includes a couple of stocks that might be too good to pass up right now CRISPR therapeutics (CRSP 3.34%) And Shopify (shop -1.85%).
1. CRISPR therapeutics
The gene-editing therapy industry is still in its infancy, but it presents an exciting long-term growth opportunity for investors. The CRISPR gene-editing market was worth just $1 billion in 2021. But by 2030, analysts at the Straits Research Project estimate it will be worth about $15 billion, growing at a compounded rate of 29.8% until then.
CRISPR is a company that is in an excellent position to capitalize on those opportunities. It is already working Vertex Pharmaceuticals Effective cure for beta-thalassemia and sickle cell disease, exa-cell – some rare blood disorders. Exa-cel is big enough that the companies are in the process of submitting a biologics license application for the treatment, which should be completed in the first quarter of this year.
Healthcare stocks have fallen 46% in the past year as investors ditch riskier growth stocks. With a market capitalization of $3.7 billion, CRISPR could potentially make an attractive acquisition target for a larger healthcare company looking to expand into gene editing.
CRISPR is sitting on about $1.9 billion in cash and marketable securities, which makes the stock a relatively safe buy (the company’s operating cash burn averages $117 million per quarter) and gives a potential acquirer an additional incentive to buy the stock: money.
If exa-cel gets approval from the Food and Drug Administration, CRISPR could quickly become a hot buy. While there is some risk here, the company’s strong cash balance adds some safety to the stock and may make investing in it worth taking a calculated risk.
Shopify is one of those stocks that I would say has taken a huge beating over the last year. It’s down 75%, which is much worse than that S&P 500Its decline is 19%, worse than the amazons 50% crashes, and even worse than the growth-based ARK Innovation ETFWhich is down to 67% in 2022.
That triple-digit growth rate would have been difficult for any business to sustain and a recession was inevitable at some point. Shopify’s problem is that like many tech businesses, it has expanded rapidly and now has to scale back and focus on cutting costs.
But Shopify’s e-commerce business has come a long way over the years. For the period ending September 30, 2022, Shopify generated approximately $1.4 billion in quarterly revenue. Although the growth rate was only 22%, that’s roughly the same revenue as all of Shopify’s 2019 revenue when its top line totaled $1.6 billion. And yet, Shopify is now trading at the level its stock was then.
It’s a transition time for big tech companies to reduce their costs and adjust their headcount to more sustainable levels. This year could spell more pain for Shopify with a possible recession.
But much of that pessimism may already be priced into the stock, and that’s why buying now could be a great move for investors willing to buy and hold and wait for the bear market to end. When it does, Shopify may be among the stocks that benefit the most from a more favorable outlook on the economy and growth stocks in general.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of the board of directors of The Motley Fool. David Zagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com, CRISPR Therapeutics, Shopify, and Vertex Pharmaceuticals. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. Motley Fool has a revealing policy.