7 Growth Stocks to Buy During a Stock Market Crash
If investors weren’t already worried, they should be following the disclosure of inflation numbers on Sept. 13. The U.S. had already experienced two straight quarters of GDP contraction. That news was released in late July. Although two …
If investors weren’t already worried, they should be following the disclosure of inflation numbers on Sept. 13. The U.S. had already experienced two straight quarters of GDP contraction. That news was released in late July. Although two consecutive quarters of GDP contraction meets the technical definition of a recession, economists have hesitated to say that a recession occurred.
Unfortunately, headline inflation for August reached 8.3%. That was higher than the 8% many economists had predicted. More ominously, core inflation, which excludes food and energy, reached 6.3% year-over-year, up from 5.9% during the previous month. The Fed’s rate hikes aren’t working, and there is now no chance of the Fed becoming less aggressive.
In short, the chances of a stock market crash just jumped up again. More economists will be wondering aloud whether we are in a recession. Although growth stocks might seem unattractive during a huge downturn of stocks, the bear market will not last forever, so some growth names are still worth buying for long-term investors.
Here are seven of the best growth stocks to buy during a stock market crash.
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XPeng (NYSE:XPEV) stock will be attractive during the next stock market crash.
For one, the Chinese EV manufacturer is minimally exposed to the U.S. market because it doesn’t sell vehicles here. Instead, XPeng obtains its revenue from the Chinese and European markets.
And despite lockdowns in China and other bottlenecks, XPeng is performing well. The company reported that its revenue soared 97.7% year-over-year in Q2 earnings. It is clear that the demand for XPeng’s vehicles is quite resilient.
Further, XPeng will begin delivering its new G9 SUV in Q4. That, along with two other new models slated to be introduced in 2023 should keep XPEV stock strong no matter what U.S. markets do.
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Buying Nio (NYSE:NIO) stock is really a matter of timing. What I mean is that Nio is going to continue to grow and its stock will appreciate moving forward. The shares currently trade around $18.30.
That price could represent a bottom or perhaps the shares will drop further. In either case, Nio’s future is bright . Once the global economy improves, NIO stock will soar.
The company’s growth is simply too good to ignore. In Q2, its vehicle sales increased 21% YOY, while its revenues jumped 22% YOY to $1.5366 billion. Nio lost $411.7 million during the quarter. The red ink might dissuade some investors.
However, the company’s position in the world’s largest EV market is extremely strong. It will become profitable, and very little can prevent that from occurring.
Nio expects its revenues to rise by as much as 39% YOY in Q3. That strong guidance provides investors with more incentive to consider buying NIO stock now or during any crash.
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For the first year following its IPO, Coupang (NASDAQ:CPNG) stock appeared to be on the path to becoming a bust. During that period the Korean ecommerce firm’s stock fell from nearly $50 to under $10.
CPNG had many problems, but its biggest one was its losses. The ecommerce giant routinely reported impressive quarterly revenue figures of well above $4 billion.
But it was also dogged by losses. For example, in Q2 of 2021, the company reported $4.478 billion of revenue and a $518.6 million net loss.
But Coupang’s financial results are rapidly changing. Last quarter, Coupang’s revenues eclipsed $5 billion and its net losses narrowed to a much better $75.5 million. Its EBITDA even turned positive, reaching $66.17 million.
The firm now expects to generate positive EBITDA for all of 2022. That turning point should serve as an excellent reminder that CPNG stock is making an impressive comeback.
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Alphabet (NASDAQ:GOOG,GOOGL) stock hasn’t had an easy 2022. As one of the leading tech names, the Silicon Valley giant has stumbled mightily as interest rates rise and easy money dries up. Google is down 30% in 2022. A July 15 stock split didn’t stanch the bleeding either. Since then, the shares have corrected a further 9%.
So what exactly is the good news? Why should investors be interested in Google with interest rates set to continue to rise and the company having lost its antitrust case in Europe?
The answer is that GOOG stock is cheap. Its current price-earnings ratio is essentially at a five-year low and is hovering around 19. Over the last ten years, its median P/E ratio has been nearly 27 So, even if Google falters further, there’s reason to believe that it will almost certainly rebound to higher levels.
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Apple (NASDAQ:AAPL) stock currently trades at around $150. Despite everything that has happened in 2022 and everything that could yet happen this year, that price point has held steady.
Apple is the world’s most valuable stock as measured by market capitalization. So it is also one of the most scrutinized names, too. That strongly implies that AAPL shares can continue to hold their value as the market tightens, since it’s unlikely to surprise the Street with unknown, bad news.
Fortunately, AAPL has fared well, and analysts’ average price target for the stock is above $182.
The company unveiled its newest lineup of iPhones recently. The firm kept the devices starting prices at the same levels as last year. Analysts had been expecting Apple to raise those prices.
Given the stable prices, the demand for iPhones can rise next year following the strong sales of the devices in 2022. Apple’s shares are exhibiting resiliency following the Fed’s third consecutive 75 basis point interest rate hike, suggesting that AAPL remains an excellent tech pick even as broader indicators indicate the economy is moving closer to a recession.
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Fiserv (NYSE:FISV) is a payment processor and a well-established financial stock. The company is particularly well-known for its merchant solutions which include Clover and Carat.
A prime reason to like Fiserv is that it blends safety and growth quite well. The stock is only slightly down in 2022 and has fared better than many fintech stocks. FISV has also grown rapidly, with a revenue YOY increase of 10% in Q2 and in the first half of the year. Its EPS increases were especially strong, as its bottom line grew 130% YOY in Q2 in the quarter and jumped 128% YOY in the first six months of 2022.
Those strong results led the company to raise its full-year guidance. It now expects its EPS to climb between 16% and 17% in 2022.
Fiserv is among several fintech firms that are seeking to purchase the payments arm of Spanish bank, Sabadell. That deal could cost up to $394 million, according to preliminary information.
Fiserv is hoping to find itself among the shortlist of final bidders for the unit that will be announced in early October. If FISV is able to buy the payments unit, its stock should climb.
Vertex Pharmaceuticals (VRTX)
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Vertex Pharmaceuticals (NASDAQ:VRTX) stock has a few strong, positive catalysts. Broadly speaking, it should benefit from President Biden’s strong support for the biotech industry. He recently signed an executive order that is supposed to spur increased manufacturing of biotech materials in the U.S.
Further, a few weeks earlier Vertx Pharmaceuticals announced that that it had received FDA approval for its ORKAMBI drug as a treatment for people one year old and older with certain types of cystic fibrosis.
Recent figures indicate that CF patients born between 2015 and 2019 have a life expectancy of just 46 years. while more than 30,000 Americans have the disorder. The data suggests that the total addressable market for ORKAMBI is quite substantial, while the company should be able to charge a high price for the drug.
VRTX shares predictably fell following the Fed rate hike. However, they rebounded nicely on Sept. 22 and are down just 1% today.
On the date of publication, Alex Sirois 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.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks.Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
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