There is no denying that things are looking ugly right now for the investment community. During this past weekend, the iconic Dow Jones Industrial Averagebroad based S&P 500and dependent on technology Nasdaq Composite (^IXIC)they were all, respectively, mired in a bear market with maximum and minimum losses of between 22% and 34%.
Although the magnitude of unrealized losses during bear markets can be disconcerting to both new and incumbent investors, history has shown time and time again that sizeable declines in the general market are the perfect opportunity for investors to patients launch. That’s because every double-digit percentage drop in major indices, including the Nasdaq, has eventually been put in the rearview mirror by a bull market rally.
Best of all, you don’t need to have a mountain of cash in your bank account to accumulate wealth on Wall Street. Since most online brokers have eliminated commission fees and minimum deposit requirements, any amount of money, even $200, can be the ideal amount to work with.
If you have $200 ready to invest that won’t be needed to pay bills or cover emergencies, the following four stocks stand out as obvious buys with the Nasdaq crash.
The first safe stock to buy with $200 as the Nasdaq plunges is a specialist e-trading company. Etsy (ETSY) 4.85%). Although retail stocks are grappling with rapidly rising interest rates and historically high inflation that threaten to reduce the purchasing power of the lowest income decile of workers, Etsy’s unique operating model may drive its valuation significantly higher with the weather.
The biggest difference between Etsy and pretty much every other online retail marketplace is customization. While Amazon is the volume leader, no other online retailer can offer the personalization or personalization that Etsy can provide. This is because it predominantly deals with small businesses and homeowners. In other words, Etsy is truly one of a kind within the online retail landscape.
Plus, Etsy hasn’t been shy about reinvesting in their business, and the rewards have been plentiful. The introduction of video ads, as well as improved search functionality, led to a 248% increase in repeat shoppers over the three-year period ending June 30, 2022. “Return shoppers” are consumers who make at least six purchases totaling $200, in the aggregate, during a 12-month follow-up period. Increasing the number of repeat buyers on the platform is what allows Etsy to increase seller fees.
As a final note, Etsy’s five-year ad revenue growth (516%) has more than doubled the increase in gross merchandise sales in the marketplace (253%) over the same time period. This suggests that merchants are seeing the value of the Etsy platform and are willing to pay a premium to get their message across to users.
Palo Alto Networks
Another obvious stock to buy right now with $200 as the Nasdaq plunges is the cyber security stock. Palo Alto Networks (PANW 3.60%). Despite recession fears weighing on growth stocks, Palo Alto has the tools and intangibles needed to overcome these hurdles.
The beauty of cybersecurity is that it has become a basic necessity service over time. No matter how poorly the US economy or stock market performs, there will always be hackers and robots trying to steal sensitive data. This means that subscription-based operating models tend to generate very predictable cash flow.
What makes Palo Alto special is its four-year (and counting) transformation that has seen the company move away from physical firewall products and toward higher-margin, cloud-based software-as-a-service subscriptions. In the span of five fiscal years (the company’s fiscal year ends July 31), Palo Alto’s percentage of revenue derived from subscriptions grew from less than 60% to just over 75%. The move away from physical firewall products should help the company reduce the revenue buildup associated with physical product replacement cycles.
Also, don’t overlook Palo Alto Networks’ penchant for smart acquisitions. Complementary acquisitions are expanding Palo Alto’s service offerings and enhancing its cross-selling opportunities. It is an ideal growth stock to weather the bear market.
green thumb industries
A third obvious stock to buy with $200 during the Nasdaq crash that is a bit more under the radar is US marijuana stocks. green thumb industries (GTBIF 10.99%). Even though marijuana stocks lost their hype due to Congress’s inability to legalize weed at the federal level, state-level legalizations are providing more than enough momentum for multi-state operators (MSOs) like Green Thumb to thrive.
As of early September, Green Thumb had 77 operating dispensaries in 15 states. While many of these are big money markets, what has been interesting is the push for Green Thumb in limited license states. A limited license market deliberately limits the number of dispensary licenses issued, allowing MSOs like Green Thumb the opportunity to build their brands and gain a following without the fear of being swamped by an MSO with bigger pockets or a smaller presence. established.
Green Thumb’s success also depends on your mix of income. More than half of the company’s sales come from beverages, vaporizers, dabs, edibles, pre-rolls, and various health and beauty products. Marijuana products are more expensive than dried cannabis flower, but more importantly, they produce higher margins.
What investors get with Green Thumb Industries is a marijuana stock that has been profitable under GAAP for eight consecutive quarters (two full years). By comparison, most MSOs haven’t even made a quarter of GAAP earnings. Considering that cannabis should be one of the fastest growing industries of the decade, Green Thumb is in a perfect position to generate big profits for its patient shareholders.
The fourth and final obvious stock to buy with $200 as the Nasdaq plunges is the telecom giant. Verizon Communications (VZ 3.13%). Although higher interest rates are prompting Wall Street to approach telcos with higher debt loads more cautiously, Verizon’s growth catalysts, revenue potential and valuation are too tempting to pass up.
While Verizon is no longer the fast-growing company it was decades ago, it can still move the needle in the right direction. The biggest ongoing catalyst for the company is the 5G revolution. It has been roughly a decade since telecommunications companies upgraded the download speed capability of their wireless infrastructure. While upgrading this infrastructure is costing Verizon a pretty penny, it should encourage consumers and businesses to switch to 5G wireless devices and increase the amount of data they download. Data is where the juiciest margins are made within Verizon’s wireless segment.
Additionally, Verizon is betting big on 5G broadband services. Thanks to recent purchases of mid-band 5G spectrum, the company believes it can reach 50 million US homes and 14 million businesses with its 5G broadband services by the end of 2025. is a relatively slow-growing opportunity, it offers increased margin package opportunities for Verizon that will make their cash flow even more predictable.
Conservative investors looking for high-yield income (6.9% yield) with a significantly safe floor can buy Verizon stock for just over seven times Wall Street’s forecast 2023 earnings per share.