The Nasdaq hosts some of the best stocks in the world. A decline in valuations could create a fantastic buying opportunity for Investors willing to buy and keep. A couple of the best titles you can buy on Nasdaq today are Align Technology (ALGN) and Netflix (NFLX).
1.Align Technology
Align Technology, the company behind the popular Invisalign clear tooth aligners, has experienced tremendous growth over the years. Despite recent fluctuations due to the pandemic, the company has experienced an average growth rate of over 33% over the past five years.
The company's growth rate has come to a halt in recent times due to difficult economic situations around the world. The closures of COVID-19 in China also negatively impacted the company's business. The way forward for Align may still be difficult, as its aligners can cost nearly $ 2.000 or more, a high cost to bear in a context of rising inflation. While patients can pay over several years, this could limit the demand for aligners in the short term.
Due to slowing sales growth and the challenges ahead for the company, the stock is down by a staggering 62% this year, while the Nasdaq is down a more modest 26%. However, the company, demonstrating confidence in its business, has decided that this downturn is a great time to buy stocks. In May, Align announced an accelerated stock repurchase agreement that provides for the repurchase of $ 200 million of common stock by the end of July. CEO Joe Hogan also intends to buy $ 2 million worth of shares.
Investors could follow the lead of analysts at Grand View Research, who expect tremendous growth from this sector. They predict that the global clear aligner market will expand at a compound annual growth rate of 29,5% through 2030. As the industry leader, Align could be a great buy-and-forget investment.
2. Netflix
Streaming giant Netflix is also in steep decline this year. With a loss close to 70%, the stock is back to 2017 levels. Last year, most investors would have probably jumped at the opportunity to buy Netflix at 2017 prices. Now, suddenly, the stock is become a bad buy due to the slowdown in the number of subscribers. This year the company laid off hundreds of employees in an effort to keep costs down due to slowing revenue growth.
However, I believe this is good for long-term investors. For too long, Netflix has known about sharing passwords and has amassed more content than was probably necessary. The company has tons of content it probably doesn't need, and you could make significant cost savings simply by taking more diligence. Meanwhile, a crackdown on password sharing could help the company increase revenue, as well as adding an ad-supported tier.
By focusing more on costs, the company may perform better in the long run. When a company is growing rapidly and sales are skyrocketing, everything is fine and no one is bothering to think about expenses because the company is exceeding expectations. But when this phenomenon stops, costs suddenly become a problem.
However, Netflix's business is by no means in crisis. The sell-off has been extreme and the stock could be a great investment if the company manages to cut some unnecessary spending. This is still an extraordinary company that has posted a profit of over $ 12 billion on revenue of $ 5 billion in the past 30 months, for an impressive 16% profit margin.
Investors should consider buying the stock and not fear. Netflix may be one of the best deals out there today, quoting just 17 times its profits.
