Market timing is not really investing. Nobody knows where the market will go tomorrow, or what a particular stock will do next week. Surprises come all the time, causing stock prices to go up or down without warning. Betting on short-term price movements is exactly that: a form of gambling. True investment success comes from buying shares of fantastic companies with great management teams, holding those shares for a long time, and allowing compound returns to work their magic.
That said, it certainly doesn’t hurt when these amazing stocks are available at rock bottom prices. This is what I see inside International Fiverr (FVRR -5.48%) And Capital Silvergate (YES -4.21%) right now. And this may not be the absolute bottom in the market for any of these spring stocks, but they are super cheap and you can always buy more if stock prices continue to drop.
Fiverr: upset the world of work
The world of work is changing before our eyes. For better or for worse, the old tradition of establishing a career with 9 to 5 hours of work, retirement plans, and a golden retirement watch is fading. The so-called gig economy is gnawing at the margins of that plan, threatening to replace it altogether in some sectors.
Fiverr International isn’t just leading the charge. This company has written entire chapters of the gig economy playbook and continues to innovate. Always appreciated by customers in the small and medium-sized business category, Fiverr recently made its entry into the corporate space with the launch of Fiverr Business. This freelance services marketplace helps buyers identify needs that can be met by a qualified freelancer and provides onboarding models for new freelance relationships. The platform is only two years old, but it already accounts for over 5% of Fiverr’s total merchandise value (GMV).
“We believe the online freelance market opportunity is vast and is in the early innings,” said Fiverr CEO Micha Kaufman in a recent earnings call. In other words, Fiverr should be able to grow rapidly for many years before encountering significant market saturation.
It appears that many market makers have missed that reminder. Fiverr’s recent growth spurt is widely seen as the direct result of the first coronavirus crashes. The stock has been down 89% since mid-February 2021, when COVID-19 vaccines became widely available. At the same time, Fiverr’s sales growth continued to skyrocket, indicating a healthy business. There is a clear disconnect between the company’s high octane growth and the dramatic stock slump:
This is the stuff that investments to create wealth are made of. Fiverr shares are poised for a powerful long-term rebound. The road to unlocking that rebound may be bumpy and Fiverr’s stock may drop further, but you shouldn’t let that stop you from investing at these tempting stock prices.
Silvergate: the bank that makes the cryptocurrency market work
Cryptocurrencies and crypto-trading services are not alone. They need to connect to the traditional banking world to allow people and businesses to exchange real-world currencies for digital currencies. Silvergate Capital was one of the first financial services providers for cryptocurrency-based projects and remains one of the leading lenders in the industry today. Additionally, the company has developed its own technology platform to manage transactions involving cryptocurrencies and fiat currencies. This Silvergate Exchange Network (SEN) is always active and provides trading services around the clock and around the world.
This combination of crucial cryptocurrency trading infrastructure and plain old capital makes Silvergate a unique entry point into the cryptocurrency market. By investing in Silvergate, you can benefit from sustained growth in this industry without choosing specific winners from the thousands of blockchain currencies available today. Silvergate and SEN stand behind a plethora of crypto projects.
For example, this is where MicroStrategy (MSTR -4.89%) she turned around when she wanted to sign a secured loan against the existing business analysis firm Bitcoin (BTC -5.91%) equity investments. And virtually all cryptocurrency exchanges you’ve heard of operate on the SEN platform, including Coinbase (CURRENCY -4.18%)Kraken, Bitstamp and Crypto.com.
So Silvergate allows you to tap into the cryptocurrency market without directly owning any digital assets and with the benefit of running a growing and profitable business. In the second quarter of 2022, the bank’s earnings increased 41% year-over-year along with an 18% increase in assets under management. The SEN system handled $ 191 billion in cryptocurrency transfers during the quarter. And the company has achieved these high-quality results during a time when Bitcoin prices have fallen by 57% and Ethereum (ET -10.06%) 68% less checked. Now imagine what Silvergate can do in a bull market in cryptocurrencies.
And of course, the stock is on fire right now. Mr. Market swept away Silvergate’s solid business results to focus on the idea that anything in the cryptocurrency sphere must be risky. Share prices fell 43% in 2022 and Silvergate is trading at the modest 10.7x earnings forward. This is a great stock to buy today and perhaps buy more if there are more price drops on tap.
Anders Bylund has positions in Bitcoin, Coinbase Global, Inc., Ethereum, Fiverr International and Silvergate Capital Corporation. The Motley Fool has positions and recommends Bitcoin, Coinbase Global, Inc., Ethereum and Fiverr International. The Motley Fool recommends Silvergate Capital Corporation. The Motley Fool has a disclosure policy.