Depending on your perspective and positioning, a stock market crash can be an absolute nightmare or a blessing in disguise. Recent volatility has pulled down prices on some promising stocks, and it’s possible that additional turbulence will bring prices on great equities even lower. Big valuation pullbacks almost certainly add to the total amount of stress in the world, but they can also be great opportunities…
With that in mind, we assembled a team of Motley Fool contributors and asked each member to profile a stock that they believe is primed to go the distance and deliver great returns. Read on to see why they think that investors will be rewarded for building positions in these three companies.
Keith Noonan (Baozun): Growth-dependent technology stocks have been hit hard amid recent market volatility, and Baozun‘s (NASDAQ:BZUN) valuation has slid far from its recent highs. The China-based e-commerce stock already looks like a good buy after the recent sell-off, and it’s possible that risk-tolerant investors could secure even better long-term returns if a deeper market crash drives the company’s share price lower.
Baozun is sometimes compared to Shopify because both companies provide e-commerce website creation and management services, but its business model is distinct enough to render the comparison somewhat misleading. So, while you might hear Baozun described as “the Shopify of China,” it’s best to evaluate the company based on its own merits.
Baozun’s core business revolves around providing a suite of online retail management tools and support services to large Western brands that are looking to tap into China’s massive and fast-growing online retail market. While management has indicated that it’s looking to move away from warehousing and order fulfillment services and focus on software services that deliver better margins, product storage and shipping still accounts for a substantial portion of the company’s business. Like Shopify, Baozun also provides services that are tailored to small businesses, but this service is still at a relatively early growth stage.
The Chinese e-commerce services company is its own beast, and should be treated as such, but it’s attractively valued and could deliver big wins for patient investors. Baozun stock trades down about 44% from its 52-week high of $57 per share and about 52% from the lifetime high that it hit in July 2018. With the company valued at $2.6 billion and trading at approximately 23 times this year’s expected earnings, Baozun still has huge room for growth.
The Trade Desk
Jamal Carnette (The Trade Desk): It’s been a tough year for high-growth tech stocks like advertising specialist The Trade Desk (NASDAQ:TTD). Shares cratered after the company reported first-quarter earnings. So naturally you’d expect the company to miss analyst estimates on revenue or earnings or provide tepid guidance — and you’d be wrong.
The Trade Desk beat analyst estimates for the top line by posting revenue growth of 37%, a growth acceleration from the 33% clip in the year-ago quarter, and blew adjusted EPS estimates of $0.77 away by reporting $1.41. Even better, the company guided for $260.5 million in revenue at the midpoint next quarter, a figure above consensus expectations and 87% higher than last year’s pandemic figure.
The Trade Desk is firing on all cylinders but shares are down nearly 44% from yearly highs established in February. Like many growth stocks, the stock had gotten ahead of itself, with a 210% explosion while revenue only increased 26% (still impressive during the pandemic). However, the recent sell-off has created an opportunity for long-term investors.
The Trade Desk’s long-term thesis remains intact. Advertising will continue to move away from print and traditional cable to digital outlets like mobile and…
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