The current market conditions aren’t conducive for short-term investing. It’s notoriously difficult to pick winning stocks with a limited time horizon, and it becomes doubly true in this extremely volatile market! A better strategy would be to find long-term stocks to buy before the bull market returns and effectively reap gains over a long-term horizon.
One of the top investing principles is that a rising tide will raise all ships. Therefore, it’s best to be patient and understand how long it takes to see tangible results from your investment.
Typically, long-term stocks have the potential to blow up on the back of their budding underlying businesses. These businesses can provide consistent returns over a prolonged period of time and make you some serious dough.
|GOOG, GOOGL||Alphabet||$118.22, $117.42|
Long-Term Stocks to Buy Before the Bull Market Returns: QuantumScape (QS)
QuantumScape (NYSE:QS) is an emerging electric vehicle (EV) battery developer which aims to commercialize solid-state batteries.
Its batteries are likely to be a game changer for the EV sector, with substantially higher energy density to offer a greater range for the same battery size. The firm completed all the objectives it had planned last year and successfully tested out 10-layer cells. It is now focusing on the development of multilayered cells with commercial dimensions.
Moreover, the goal is to reduce its volume manufacturing costs significantly. It expects to produce cells for testing in 2023 and embarks on commercial production in 2024.
If everything is on point, it stands to gain immensely from its first-mover advantage. Research suggests that the solid-state market could grow at a whopping 36% from 2021 to 2028. Therefore it could potentially blow up in the next few years.
Shopify (NYSE:SHOP) is an e-commerce juggernaut that has established itself as the top e-commerce infrastructure provider. It has operated a hypergrowth business over the past several years that has delivered double-digit growth consistently. However, its stock has taken a hit in the current market downturn and trades at multi-year lows. Nevertheless, the long-term tailwinds of e-commerce adoption aren’t going anywhere.
In the past few quarters, SHOP missed analyst estimates by a fair margin, triggering a massive selloff. However, it still has a resilient business model with the robust financial flexibility to weather the storm effectively.
Moreover, despite the challenges, it continues to launch new products and updates to strengthen its service quality further. Hence, it remains an excellent business in a struggling industry at this time.
Long-Term Stocks to Buy Before the Bull Market Returns: ChargePoint Holdings (CHPT)
ChargePoint (NYSE:CHPT) has a dominant position in the charging station niche offering an incredible value proposition to its investors. Its stock was on the uptrend during the pandemic years, but it’s taken quite a beating in line with the broader market. Though it generates the bulk of its sales from North America, it’s been expanding briskly in Europe. It has effectively diversified its revenue base from a handful of customers to a much wider pool of clients that will drive subscription sales to new heights.
ChargePoint currently operates 174,000 ports, and roughly 51,000 of those are in Europe. Europe is a key EV market, so CHPT’s expansion could add another layer to its growth story. The company generated incredible 65% revenue growth last year and judging from a 101.5% bump in sales during the first quarter, it isn’t stopping anytime soon.
Vista Energy (VIST)
The energy sector has been booming due to the rising inflationary pressures and the Russia-Ukraine war. Oil and gas giants have enjoyed a strong run of late, and a few of the lesser-known names in the space have performed even better.
Mexico-based upstream oil and gas player Vista Energy (NYSE:VIST) is one such player that has flown under the radar and has posted more than an 80% gain in the past 12 months.
Vista has its core assets in Vaca Muerta, the second-biggest shale gas deposit globally. Production is at a record high, and the company plans to invest $2.3 billion to boost production by double-digits from 2022 to 2026. Meanwhile, its free cash flows have jumped from a negative $0.11 billion to a positive $0.19 billion. Its top- and bottom-line results are on an upward trajectory, and current headwinds point to a strong showing ahead.
Long-Term Stocks to Buy Before the Bull Market Returns: Alphabet (GOOG, GOOGL)
Internet giant Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) has struggled with its advertising peers. The company generates more than 80% of its sales from Google’s advertising business, which includes its primary search engine, YouTube site and advertising network. However, amidst the drop in discretionary spending, its advertising business has taken a considerable hit.
Nevertheless, it’s still growing at a healthy pace, while its Cloud business is making up for the loss of sales on the advertising side. The truck loads of cash it possesses is mighty impressive, with cash and short-term investments totaling $125 billion at the conclusion of June. Additionally, it returned a remarkable $15.2 billion in cash to its investors via share repurchases during the second quarter, which is a testament to its shareholder commitment.
Novo Nordisk (NVO)
Novo Nordisk (NYSE:NVO) is one of the top-performing drug makers with an enviable lineup of diabetes and anti-obesity medications. It has been one of the leaders in the diabetes care business for decades, generating 80% of its sales from the niche. Moreover, it boasts a market share of 30.1% globally in the diabetes care market. Additionally, its anti-obesity drug, Wegovy, has grown sales by an incredible $480 million for the first quarter.
Both these sectors are national health concerns, and the market will only increase at an incredible pace down the road. The prevalence of diabetes is likely to increase by 54% to over 54.9 million Americans by 2030. Novo has performed remarkably across its top and bottom lines over the past several years, and market tailwinds are likely to make it a fantastic bet over the long run.
Long-Term Stocks to Buy Before the Bull Market Returns: McCormick (MKC)
McCormick (NYSE:MKC) is a specialty food giant and a leader in producing herbs, seasonings and spices. Its flavoring solutions are sold across 170 countries, which gives it a global appeal. Perhaps more importantly for investors, it has established itself as a dividend champion, boasting 36 consecutive years of growth in dividends.
Barring the second quarter, the company posted healthy revenue and earnings beats in the past five quarters. The current macroeconomic pressures have proven spoilsport for the business, but it has nothing on its amazing track record. Its profitability margins are spectacular, with a five-year average of 40.3%. Similarly, MKC generated a 7.3% increase in sales during the same period. The business has proven to be dependable over the years, and its penchant for rewarding its shareholders is the icing on the cake.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.