Nasdaq stocks have performed well this year. The Nasdaq Composite has risen nearly 25% year-to-date. Investors should not be surprised given that the index is tech and internet heavy. Investors tend to hear about the outliers among the group, which perform extremely well or extremely poorly. Yet, these stories often represent a small sample of the entire exchange. The Nasdaq represents many companies. Indeed the Nasdaq exchange itself comprises over 3,300 stocks. The companies within the exchange are very much investment grade, as their strength during the novel coronavirus pandemic attests.
Several of the names on this following list will be very familiar given their household name status. Others may be less well-known. Nonetheless, all of these stocks have performed well in 2020 and look to continue to do so. Here are seven of the best Nasdaq stocks to buy now despite 2020’s challenges:
- Apple (NASDAQ:AAPL)
- Tesla (NASDAQ:TSLA)
- Seagen Inc. (NASDAQ:SGEN)
- PayPal (NASDAQ:PYPL)
- MercadoLibre (NASDAQ:MELI)
- Citrix Systems (NASDAQ:CTXS)
- Crispr Therapeutics AG (NASDAQ:CRSP)
Nasdaq Stocks to Buy: Apple (AAPL)
Unfortunately, investors who picked up AAPL stock at the beginning of September are likely less than wild about it. It has depreciated about 11% in that time frame. However, despite the recent selloff in tech, the stock remains a strong performer, having risen 59% year-to-date.
The next two years are going to mark a transition for Apple which should send prices higher. Back in June, Tim Cook announced that Apple will transition away from Intel (NASDAQ:INTC) processors for its Mac series. Apple has developed its own Apple Silicon ARM processors. There are rumors that Apple will release its first Apple silicon Mac in November.
Not only does this change the company’s supply chain and internal device hardware, but it also ushers in a new era. Apple has been long rumored to be contemplating developing chips. Now it is. This means that the next few years could see Apple operating in totally new sectors. The company has been a cash producing machine, and now it has the potential to branch out into areas that will power upcoming trends.
Tesla has flown incredibly high this year. It now trades well above $400 after nearly reaching $500 per share. Shares sold for under $100 to begin the year. Markets have adopted the idea of EVs wholesale, and Tesla has been the most visible beneficiary.
Moreover the stock perfectly summarizes the growth vs. value argument in investing. From a fundamental perspective, there’s a lot to say that TSLA stock is one to avoid. Its valuation metrics include a price-to-earnings ratio of 1,144.97. This is an astronomically high number. Tesla’s price-to-sales ratio is worse than most of its peers in the automotive industry.
Leading the Shift
Yet, that misses the point. One that markets have agreed with en masse. This company represents a paradigm shift and may well be one which defines the automotive industry for decades to come. It is going to remain the leader in EVs for many years to come. That’s the reward it gets for having pioneered this industry.
Tesla delivered 139,300 vehicles in Q3. This breaks its previous record 0f 112,000 deliveries in Q3 ‘19.
Seagen, previously Seattle Genetics, is a biotech company that develops cancer therapeutics. Several of its therapeutics are being investigated in phase 3 trials for efficacy against a wide range of cancers.
Of course, there are many biotechnology companies developing cancer therapeutics at various stages of clinical approval. So, why should investors be interested in Seagen specifically? The company achieved record sales of $240.5 million in Q2 from its three marketed therapeutics. It is on schedule to surpass $1 billion in revenues in 2020. These sales figures are key drivers of SGEN stock price appreciation this year.
Year-to-date the stock has appreciated roughly 80%.
As more of those clinical efficacy investigations pass through Food and Drug Administration approval, the company will have more avenues toward revenue. This of course opens up the ability for the company to fund new drug development. But for the short and mid terms, the company has plenty of revenue and growth with its current pipeline.
Analyst sentiment regarding PayPal is strong. As a matter of fact, the vast majority of analysts covering PYPL stock rate it a buy. Target prices also range as high as $285 per share, which represents a near 40% price increase if purchased now. The company has risen to prominence over the past several years as a leader in the fintech space.
The stock is highly valued with a P/E ratio above 90, yet it has shown year-over-year sales growth of about 20% over the past half decade. As a leader in the fintech/payments space there’s a lot of reason to believe it can climb.
For example, its developments with Venmo make it stand out from other Nasdaq stocks.
Specifically, Paypal owns Venmo, which is very popular among younger generations. Venmo’s app makes payments very simple and customizable. Ultimately Venmo makes Paypal itself more attractive as a stock. There’s a lot of potential for revenue increases from Venmo from current levels according to analysts:
“Venmo now has more than 60 million active users … [Wolfe Research analyst Darrin Peller] estimates that the Venmo credit card, which includes 3% cash back on users’ highest-spending categories, could generate $200 a year per user, well above the $10 average for Venmo now. Every 1% of Venmo users who sign up for the card could equate to $150 million in annual revenue for PayPal.”
All of these factors stack up in a way that makes PYPL stock stand out among its peers.
MercadoLibre is a stock that readers may not have heard of. The company is an e-commerce platform headquartered in Argentina serving Latin America. Analysts are somewhat mixed on it but overall rate it a buy. The company has shown massive growth over the previous year, and serves an emerging market in Latin America as a whole.
Furthermore, the company is undergoing a massive growth phase with many positive signals from its Q2 earnings report:
- $878.4 million in net revenues. An increase of 123.4% year-over-year.
- Total payment volume of $11.2 billion, which represents a 142.1% boost year-over-year.
- An increase in users year-over-year of 37.6% from 47.6 million to 65.5 million
Specifically, for investors who are interested in Amazon (NASDAQ:AMZN) and Alibaba (NYSE:BABA), MELI stock is certainly a stock to consider. According to Statista, Latin America had 267.4 million ecommerce shoppers in 2019, which was forecast to increase by 31% by 2024. The same report also highlights the fact that the $70 billion of sales in the region in 2019 should grow to $116 billion by 2023.
Citrix Systems (CTXS)
Investors should consider CTXS stock for many reasons. It hasn’t risen massively, nor is it really “high flying.” Yet it could very well appreciate soon. The company helps organize personalized, digital work spaces. As such, the company focuses on automation and personalization, which allow employees to work anywhere. Of course this is becoming a bigger trend, which has been accelerated by the pandemic.
Value, But Undervalued
Citrix Systems competes with Adobe (NASDAQ:ADBE) and Oracle (NYSE:ORCL) among others. In terms of value investing, Citrix is attractive vis-à-vis Adobe in that the latter carries a P/E ratio of 63.33x. CTXS stock carries a much lower P/E ratio of 23.35x, along with a higher WACC vs. ROIC ratio than Adobe. That means you pay less for a dollar of Citrix earnings by far. And the WACC vs. ROIC ratios of each respective company favors Citrix Systems. Adobe is more heavily favored by the markets as indicated by its high P/E ratio, but Citrix Systems has a big catalyst in the work from home trend.
CTXS stock is relatively undervalued now, but if it can position itself as a leader in the eyes of the market, then it can capitalize on work trends.
Crispr Therapeutics AG (CRSP)
CRSP stock represents the exciting arena of gene editing. The company is truly at the leading edge of science and scientific discovery. In fact, its co-founder, Emmanuelle Charpentier was recently awarded the 2020 Nobel Prize in Chemistry for work on the CRISPR system.
The CRISPR/Cas9 system allows for precise changes to be made to genomic DNA. This allows scientists to disrupt, delete, or insert information into the DNA helix. The applications of this tool are far reaching but currently include research for use in treating diabetes, muscular dystrophy, cancer and sickle-cell disease. CRISPR Therapeutics is currently enrolling patients in clinical trials for cancer and sickle-cell studies.
Of course, it’s hard to know where this advancement in science will lead, but the potential seems massive. So despite financials which are not great — but not terrible either — CRSP stock could skyrocket over time. I personally like this stock because it represents a true paradigm shift. CRISPR is the pioneer in this field. Therefore, it should continue to develop scientific techniques that use the novel CRISPR/Cas9 system. Other companies are making strides in this area, but CRSP stock should benefit massively from its leading scientific position.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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.