It’s been a tough year for stocks (and investors) in general. But some stocks have had a particularly trying time. These companies faced specific challenges – and it caused their stocks to fall further than the general market. In many cases, companies have overcome or are in the process of overcoming their difficulties. And they are ready for a rebound. Now is the time to bet on these players.
I’m thinking of a telemedicine leader, a coronavirus vaccine latecomer, and a much-loved entertainment company that recently announced some big news. Let’s take a closer look at these potentially explosive stocks to buy before 2023.
1. Teladoc Health
Teladoc Health (TDOC -3.40%) dropped nearly 70% this year. The telemedicine giant announced non-cash goodwill impairment charges of $1 billion in its first two quarterly reports. These were linked to its purchase of Livongo in 2020. This heightened investor concerns about the company’s lack of profitability so far.
But things are moving for Teladoc. In the third quarter, it reported no additional impairment charges. Instead, it said its quarterly loss had shrunk. The company has also made progress in other key areas.
For example, it continued to grow paying members in the US and revenue per member quarter over quarter over the past year. Teladoc also reported an increase in transaction sizes. The average deal today is 50% larger than a year ago.
It is also important to note that buying Livongo chronic care can eventually pay off. Teladoc’s suite of chronic care offerings has helped it increase member retention rates.
Today, Teladoc is trading for 1.9 times its sales. It’s around its cheapest ever. If Teladoc delivers more good news, the share price gains could be huge.
Novavax (NVAX -2.88%) is heading for an annual decline of almost 90%. That’s a far cry from its 2,700% gain in 2020.
What happened? Investors were then betting on the company’s ability to market a vaccine against the coronavirus. Novavax did, but about a year later than the current market leaders. As a result, Novavax missed out on the original multi-billion dollar opportunity. And the shares fell. It was disappointing.
But here’s the good news. The story is not over for Novavax. The coronavirus vaccine is Novavax’s first marketed product. And that helped the company generate $735 million in revenue in the third quarter. Recently, regulators approved the vaccine for use as a booster. This allows Novavax to participate in the annual coronavirus booster market.
Recurring revenue should help Novavax advance its other pipeline products and grow as a business. And speaking of the pipeline, Novavax is about to start a phase 2 trial for its combined coronavirus/flu vaccine candidate. Success here could equal a significant position in the long-term vaccine market.
Especially given Novavax’s losses this year, any positive news on recall sales or the combination vaccine program could trigger a new round of share price gains.
disney (SAY -0.01%) continues to make its guests smile. But that hasn’t made investors smile this year. The entertainment giant missed analysts’ sales and earnings estimates in its latest earnings report. And the title fell by more than 35%.
Disney’s business costs hampered growth. So why should you buy Disney stock before 2023? Because the company may be on its way to solving its problems.
Disney recently brought back its longtime CEO Bob Iger. He is known for many Disney hits. Iger led big strategic moves like the acquisition of Pixar. And Iger was CEO when the company created and launched the blockbuster Frozen.
Disney’s earnings and share price soared during Iger’s tenure.
DIS data by YCharts
These days can be particularly difficult. The pandemic continues, and rising inflation and general economic difficulties are weighing on consumers’ wallets. Still, Iger, with his years of experience in this top role at Disney, is the perfect person to take on the task.
And the advances ahead could lead to explosive growth for this downed entertainment stock.
Adria Cimino has no position in the stocks mentioned. The Motley Fool fills positions and recommends Teladoc Health and Walt Disney. The Motley Fool recommends the following options: January 2024 long calls at $145 on Walt Disney and January 2024 short calls at $155 on Walt Disney. The Motley Fool has a disclosure policy.
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