Nasdaq Bear Market: 5 Tremendous Growth Stocks You Will Regret Not Buying Down

This has been a year to remember for investors in seemingly all the wrong ways. As the major US indices hit their respective all-time closing highs between mid-November and the first week of January, the timeless Industrial average of the Dow Joneswide-ranging S&P 500and growth oriented Nasdaq composite (^ IXIC 0.00%) they have lost up to 19%, 24% and 34% of their value. You will notice from the decline in the S&P 500 and the Nasdaq that both indices have entered a bear market.

While bear markets don’t happen that often, they can be scary, especially for new investors. The speed and unpredictability of downward movements can cause investors to question their resolve. Yet history shows that buying during the bear market’s decline is a brilliant move. As any major decline in major US indices is ultimately wiped out by a bull market, double-digit percentage drops are the go-ahead for shopping.

A growling bear in front of a free-falling stock chart.

Image source: Getty Images.

It is a particularly smart time to hunt for bargains for rising stocks, which have been disproportionately throttled by the Nasdaq bear market. The following are five stocks with extraordinary growth ripe for collection that you will regret not buying during the Nasdaq bear market decline.

PayPal holdings

The first phenomenally growing stock you would want to buy during the Nasdaq bear market decline is the fintech behemoth PayPal holdings (PYPL 1.20%). While Wall Street is concerned about the short-term impact of historically high inflation on digital spending, they are ignoring the long-term potential of this industry leader.

One of the best things about peer-to-peer digital payment platforms is that they are still in the early stages of their growth. Despite supply chain and inflation challenges, PayPal’s total payment volume still grew by 15%, in constant currency, during the first quarter, with 2.4 million new net active accounts. These are respectable figures given the 1.6% retracement for US gross domestic product in the first quarter.

More importantly, we are seeing a steady increase in engagement from active users on PayPal platforms. At the end of 2020, active accounts were completing 40.9 transactions in the final 12-month (ttm) period. But at the end of the first quarter (March 2022), active accounts completed an average of 47 transactions on the ttm. Since PayPal is a paid business, increased engagement among active users bodes well for sustained double-digit earnings growth.

PayPal is historically cheap and ripe to be chosen by opportunistic investors.

Palo Alto networks

The next strong-growth stock asking to be bought during the Nasdaq bear market decline is cybersecurity firm Palo Alto networks (PANW 0.60%). Despite being more expensive than many growth stocks, Palo Alto has a trio of catalysts in its sails.

First, cybersecurity has evolved into a basic service. No matter how good or bad the US economy and / or stock market is doing, hackers and robots don’t take the time to try and steal corporate and customer data. This places a predictable level of demand below most cybersecurity titles, including Palo Alto.

Second, Palo Alto is in the midst of a multi-year transition that is devaluing physical firewall products in favor of cloud-based subscriptions. Cloud-centric cybersecurity solutions are more agile and effective in responding to potential threats. Additionally, subscriptions can generate higher margins and more stable cash flow than physical firewall products.

Finally, Palo Alto is differentiating its product offerings and expanding its ecosystem by making regular bolt-on acquisitions. These small acquisitions allow the company to reach a wider audience and cross-sell its security solutions.

A person closely examining a microchip while wearing a sterile suit.

Image source: Getty Images.

Broadcom

Another ingenious growing stock to buy with the Nasdaq plunging into bear market territory is the semiconductor chip solution provider Broadcom (AVGO -0.96%). Putting aside the fact that semiconductor stocks are cyclical and the US economy has shown numerous warning signs of a recession, Broadcom has a few tricks up its sleeve that make it an easy buy.

For example, Broadcom is expected to enjoy steady sales growth following the 5G revolution. It’s been about a decade since telecom service providers have significantly improved wireless download speeds. Continuous upgrading of the wireless infrastructure to support 5G speeds helps Broadcom, as the company supplies 5G wireless chips and other accessories found in next-generation smartphones.

Furthermore, this is a company that ended 2021 with a historical backlog of $ 14.9 billion. Even if short-term demand were to decline somewhat, the company’s huge backlog would ensure a steady operating cash flow. It is this cash flow that has helped Broadcom increase its quarterly dividend by more than 5,700% since 2010.

As a final note, cyclical titles like Broadcom spend far more time in the sun than under the clouds. While recessions are inevitable, they usually only last a couple of quarters. By comparison, expansion periods often last for years.

Green thumb industries

A surprisingly growing fourth stock that you will regret not buying during the decline is US marijuana stock Green thumb industries (GTBIF 4.13%). While Congress has failed to pass any cannabis legalization or banking reform measures, there are more than enough catalysts for multi-state operators (MSOs) like Green Thumb to thrive.

By the end of March, Green Thumb had more than six dozen operating dispensaries, many of which were located in high-dollar markets. Interestingly, however, the company has focused its efforts on pushing towards limited licensing markets. A limited license state is a state that purposely restricts the issuing of retail licenses in order to allow all licensees a fair chance to build their own brands and gain a following.

What makes Green Thumb Industries truly special is its product mix. Well over half of the company’s sales come from the sale of cookware derivatives, such as beverages, vaporizers and oils. Cannabis-derived products offer significantly higher prices and margins than dried cannabis. It is this mix of revenue that has helped Green Thumb achieve seven consecutive quarters of profits under the Generally Accepted Accounting Principle (GAAP).

Since most marijuana stocks have not yet reached profitability, it shows how far Green Thumb is ahead of the competition, compared to its peers.

MasterCard

The fifth and final huge growth title that you will regret not buying during the decline is the payment processor MasterCard (BUT -0.44%). Fears of a near-term recession shouldn’t scare patient investors away from a net leader like Mastercard.

The cyclical nature of payment processors is one of the reasons to shop with Mastercard security. As I described with Broadcom, economic expansions last substantially longer than contractions and recessions. Buying and holding Mastercard allows investors to take advantage of the natural expansion of the US economy.

Mastercard is also the # 1 payment processor. 2 by purchase volume of the credit card network in the United States. Being the no. 2 is an envious position in the largest consumer market in the world.

Investors should take note that Mastercard strictly adheres to the payment processing side of the equation. While it would have no problem collecting interest income as a lender, doing so would expose the company to defaults and loan charges during inevitable recessions. Avoiding loans means not having to set aside capital to cover loan losses, which is why Mastercard’s profit margin has remained above 40%.

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