- Although few like to see red ink in their portfolios, a bearish cycle can allow patient investors to pick up some great bargains among growth stocks.
- NuScale Power (SMR): Though hardly a discount, NuScale Power’s revolutionary nuclear power technology is easily one of the most compelling growth stocks to buy.
- Fiverr (FVRR): Given the high chance of fluidity in the labor force, Fiverr’s freelance marketplace could eventually enjoy significant demand.
- Block (SQ): Substantially beaten up due to inflationary pressures, Block is starting to look much more attractive as a speculative candidate among growth stocks to buy.
- Zscaler (ZS): A cloud security firm, Zscaler is likely poised to attract interest due to the heightened geopolitical environment.
- Tonix Pharmaceuticals (TNXP): Although heavily bruised, Tonix Pharmaceuticals’ smallpox and monkeypox solutions just became extraordinarily relevant.
- Beyond Meat (BYND): While a terribly risky idea among growth stocks, speculators may like BYND because it just dipped below its IPO price.
- Applied Blockchain (APLD): For those who really love to live dangerously, APLD is one of the growth stocks to speculate on the crypto winter.
Although Wall Street’s keyboard commandos like to talk tough, the reality is that few people enjoy bear market cycles when the first materialize. In many cases, downturns can be sudden, with little to no warning, as was the case with the onset of the coronavirus pandemic. Therefore, investors end up losing money on paper though it’s important to keep perspective: Certain growth stocks can be screaming buys during market meltdowns.
To be clear, it’s impossible to say with absolute certainty that we’re on the precipice of a bearish cycle. However, rising inflation seems to suggest that a recession is on the horizon. What many folks apparently forget is that the blistering inflation of the 1970s and early 1980s was at least partially justified from population growth. Today, we’re suffering from population decline, which exacerbates the expansion of the money stock.
Overall, this circumstance is net negative for growth stocks and so far, the technicals have reflected the fundamental backdrop. Nevertheless, for the bold contrarian, the present juncture provides a time-capsule opportunity if you missed the boat the first time around.
If that’s you, below are potentially promising growth stocks to consider.
NuScale Power (SMR)
On paper, NuScale Power (NYSE:SMR) hardly provides any discount at all. Entering the public market via a reverse merger with a special purpose acquisition company (SPAC), SMR stock is only down less than a dollar from its initial offering price of $10 per unit. But what it lacks in an outright price cut, it more than makes up for in sheer relevance.
NuScale specializes in advanced nuclear power technology, specifically a platform called small modular reactor (SMR). Unlike traditional nuclear energy facilities, SMRs — as their label suggests — feature a much smaller physical footprint, enabling their integration into spaces that previously could not accommodate their larger counterparts. In addition, SMRs utilize state-of-the-art safety mechanisms, making them appropriately viable solutions to current energy needs.
And make no mistake about it, nuclear is a vital component of the broader energy discussion. According to the Office of Nuclear Energy, the underlying power source commands a capacity factor of 92.5%, far higher than any other source. That’s why SMR is one of the highest-conviction growth stocks to buy.
As expected, the fading fear of the Covid-19 pandemic (at least here in the U.S.) has many entities in broader society seeking normalization, including the workplace. Upper management wants employees back in the office while worker bees are putting up a fierce resistance. The thing is, without Covid-19, businesses might not be in a mood to accommodate their employees’ entitlement complex.
In the my-way-or-the-highway battle between employers and employees, the former has the leverage and the resources. But that doesn’t mean worker bees must acquiesce, which brings up Fiverr (NYSE:FVRR) as one of the growth stocks to buy.
A freelancer marketplace, Fiverr helps connect professionals with enterprises that have short-term specialized needs to cover. This setup enables people to participate in the gig economy remotely while contracting companies receive critical services.
It’s a win-win, except for FVRR stock, which is down over 64% year-to-date through the May 26 session. Though analysts might not like Fiverr’s outlook, contemporary labor force dynamics may potentially be favorable for the burgeoning gig economy.
Formerly known as Square, Block (NYSE:SQ) has long been one of the most relevant growth stocks to buy because of the underlying game-changing service. By primarily providing point-of-sale solutions to small businesses, Block helped level the playing field between up-and-coming enterprises versus their much larger counterparts. As well, the company offers business management software, enabling entrepreneurs to concentrate on growing their business.
Sure enough, following a panicked selloff during the initial onset of the Covid-19 pandemic, SQ became one of the top-performing growth stocks to buy. But during the backend of 2021, SQ began slipping due to inflationary concerns. The pain accelerated this year, with the stock shedding a worrying 49% since its January opener. In addition, the company posted revenue of $3.96 billion in the first quarter of 2022, which was down nearly 22% against the year-ago level.
However, entrepreneurial interest remains high despite significant challenges. Plus, after having lost so much market value, the premium associated with SQ stock looks much more attractive.
Given its core business as a cloud security firm, Zscaler (NASDAQ:ZS) natively enjoys extraordinary relevance. In 2020, the average cost of a data breach amounted to $8.64 million. Further, the U.S. saw a 5.49% increase in data breaches compared to 2019, a dynamic which contrasted with worldwide trends. And that’s just an average cost — some enterprises can suffer much more severely.
In particular, U.S. foreign policy increasingly puts its government and its private businesses at risk of geopolitical retaliation. Moreover, the security threats of today are much more pernicious than in generations past, with nefarious agents able to endanger critical infrastructures and supply chain networks. Since the U.S. is unlikely to back down from adversarial challenges, Zscaler will likely expands its relevance.
Nevertheless, ZS is one of the growth stocks to buy on bargain. Inflationary pressures impose a poor business backdrop for Zscaler as companies might look to skimp on costs. However, the critical nature of Zscaler’s specialty should give the firm some rope.
Tonix Pharmaceuticals (TNXP)
On surface level, some investors may be tempted to dismiss Tonix Pharmaceuticals (NASDAQ:TNXP) as one of the growth stocks to buy because of its TNX-1840 and TNX-1850 Covid-19 vaccine. With people tired of the disease combined with elements of vaccine hesitancy, Tonix seems utterly irrelevant in that arena. Not to fear, though, because Tonix is also developing TNX-801, a vaccine for smallpox and monkeypox.
As you’ve probably heard, monkeypox outbreaks have raised concerns internationally, with cases reported in Europe and North America. Here’s the truth about anything pox related: While Covid-19 is mostly an “internal” disease, monkeypox produces revolting symptoms such as blisters or lesions. And they can grow all over your body, resulting in truly distressing circumstances.
Safe to say, I for one won’t mess around with monkeypox. So, if that means getting vaccinated, boosted, double-boosted, triple-boosted, I’m going to do it. I think many others feel the same, meaning TNXP is a speculative buy.
Beyond Meat (BYND)
Another fact of monkeypox is that it can transmit from animals to humans. That’s just one more reason why over the long run, people should eschew animal-based protein for the plant-based variety. And that segues into Beyond Meat (NASDAQ:BYND), one of the pioneers in the revitalized “fake meat” industry. While I was an early critic of the movement, I’m starting to come around to the concept.
Still, BYND is a vexing proposition because it’s one of the most-embattled growth stocks available. On a YTD basis, the security has shed 59% of its market value, while over the trailing year, it has dropped 78%. A significant headwind is growing concerns about profitability. In Q1 2022, revenue was basically flat on a year-over-year basis, while net losses expanded to $100.5 million (from $27.3 million in the year-ago quarter).
Ultimately, BYND is best left for speculators. With a possible recession on the horizon, Beyond Meat’s higher prices relative to the real deal is worrisome. However, those that have strong convictions of a turnaround should give it another look, especially if it drops back below its IPO price of $25.
Applied Blockchain (APLD)
I’m going to end this list of growth stocks to buy with one of the most speculative ideas I can think of. If you can’t stand the thought of volatility, turn away, because this is going to be a wild ride. Even worse, I can’t say you’re going to be better off for it in the long run.
As the name suggests, Applied Blockchain (NASDAQ:APLD) is in the business of mining cryptocurrencies. If I was mentioning this idea last year, it would have been among the best-performing ideas. This year, not so much. Since its January opener, APLD stock has dropped 84%.
While shocking, it’s not the most surprising result. Cryptos are inherently volatile, turning paupers into princes back to paupers in a blink of an eye. The wildness can be particularly cruel for mining enterprises, which is in the business of minting and selling cryptos — as opposed to holding on for dear life (HODLing).
Still, Applied Blockchain might be a worthwhile candidate among growth stocks to buy, because cryptos have achieved mainstream integration. In other words, the cat’s out of the bag, meaning that a few years from now, another robust rally could materialize.
On the date of publication, Josh Enomoto 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.