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7 Top Stocks That Held Up Well During This Recent Market Bloodbath

InvestorPlace ·  Oct 11, 2021 06:00

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

The market turmoil we've seen over the past couple of years has been incredible. Starting with a pandemic, investors got a front-row seat to watch just how impressively the economy can rebound with a little monetary and fiscal stimulus. Nonetheless, those who invested in top stocks with staying power to handle this volatility did much better than those with higher-risk portfolios.

Indeed, investors have reason to be cautious with building their portfolios right now. We're not entirely out of this pandemic yet. Interest rates remain low, but that can change in an instant (and just might).

As we've seen with the recent debt ceiling brinksmanship, much of the economic recovery we've seen is tied to the ability of the federal government to take on increasingly large debt loads.

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How this will all play out remains uncertain. Indeed, the continued rise in equity markets we've seen seems to assure investors that things are fine for now.

However, those looking for top stocks to battle any future volatility may want to take a hard look at companies that battled previous shocks well. These seven top stocks are all companies that have outperformed through the pandemic. However, these are also companies with the potential to continue to outperform.

Let's dive into why these top stocks may deserve a spot in investor portfolios right now:

  • Pfizer (NYSE:PFE)
  • Netflix (NASDAQ:NFLX)
  • Zoom (NASDAQ:ZM)
  • Teladoc (NYSE:TDOC)
  • Pinterest (NYSE:PINS)
  • Match Group (NASDAQ:MTCH)
  • Doordash (NYSE:DASH)

Top Stocks: Pfizer (PFE)

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One might say "of course" to the idea of Pfizer being one of the top stocks throughout the pandemic. As one of the key providers of coronavirus vaccines, Pfizer has benefited from the calamity that has befallen us.

However, one could also argue that Pfizer was fundamentally cheap prior to the pandemic. This is a mega-cap pharmaceutical company with one of the most impressive drug pipelines out there. For those seeking companies with steady long-term growth prospects, Pfizer has been a great pick over the long run.

That said, big Pharma valuations aren't what they used to be. Indeed, this is a stock that's still trading at its dot-com bubble levels (it never really fully recovered to make significant new highs). Thus, one might also view this stock as a laggard in the growth department.

Pfizer's current valuation of only 18-times earnings, combined with its 3.7% dividend yield is too juicy to pass up. In good times or bad, this is a company with a bond-like yield trading at reasonable levels. It's also a company with an excellent growth trajectory for those concerned about the pandemic continuing on into an endemic.

In my view, Pfizer is a no-brainer stock to hold right now, particularly for those concerned about another bloodbath on the horizon.

Netflix (NFLX)

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The whole "Netflix and chill" term has been taken to another level as a result of the pandemic. With few other options, consumers have continued to find ways of entertaining themselves at home.

As the leading streaming provider globally, Netflix continues to demand a high valuation multiple, as investors expect at-home entertainment to continue on strong.

It's hard to argue against that logic. Years of cord-cutting and streaming adoption have created a robust secular growth catalyst. As one of the earliest players in this space, Netflix has been a key beneficiary of this trend.

Those bullish on the long-term growth potential of streaming plays will like Netflix's dominant market position.

Yes, other competitors such as Disney (NYSE:DIS) and Amazon (NASDAQ:AMZN) are aggressively expanding into the streaming world. However, Netflix's first-mover advantage and entrenched customer base remain a source of strength for this company.

Those bullish on Netflix's ability to raise prices and hold better margins over the long-term will like this stock. It's not a cheap growth stock by any stretch of the imagination. However, Netflix remains among the top stocks for many growth investors bullish on the long-term potential of the streaming space.

Top Stocks to Buy: Zoom (ZM)

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Another direct beneficiary of the pandemic, Zoom has had a bit of a rough go of late. Indeed, this stock has more than halved from its post-pandemic highs. That much can be expected from a company that's entire business took off in an astronomical fashion as businesses and consumers sought low-cost video conferencing technology.

Now, the question investors have to ask is whether the business world structurally changed. Is the growth of video conferencing going to plateau or plummet as we go back to the office?

These concerns are valid and are being baked into Zoom's valuation at these levels. Indeed, I'd argue the market may have overdone the selloff in this growth stock with the recent dip in ZM stock.

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Trading at 77-times earnings, Zoom stock isn't cheap compared to many sectors. However, this is a discount of a lifetime for hyper-growth investors compared to where this company traded earlier this year.

Accordingly, Zoom is a speculative growth stock I've got on my watch list right now. Those who believe that the paradigm has officially shifted, and we're about to see a lot more digital meetings ten years from now, may want to consider ZM stock at these levels.

Teladoc (TDOC)

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Similar to Zoom, Teladoc is a company that has seen its share price boom and crash. Indeed, this is another post-pandemic rally play that has sold off by more than 50%. However, similar to Zoom, investors bullish on the long-term trajectory of telemedicine will like this stock at these levels.

Teladoc isn't yet profitable, so it's a bit more difficult to value. However, there's a strong argument to be made that telemedicine could stick around for the long haul.

The company has shown strength in growing its revenue in recent quarters. Teledoc has maintained triple-digit revenue growth in recent quarters, signaling the strength of its platform and the demand for its services from providers.

Additionally, the company has invested in various mental health-related services, which is among the segments Teladoc believes it can fully transform into an online-oriented business. I think there's some credence to be made for this thesis, and view TDOC stock as one that's worth taking a look at right now.

Top Stocks to Buy: Pinterest (PINS)

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Social media is another sector that has done well in this recent market bloodbath. The pandemic provided strong tailwinds for companies like Pinterest to see outsized growth.

PINS stock has actually been down on recent earnings despite rather impressive numbers. Pinterest has shown revenue growth in the high double-digits, and average revenue per user (ARPU) growth substantially above the industry average.

However, total active users have declined of late, leading some investors to question the growth on this platform.

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The company notes that International growth remains robust, with most of these losses occurring from desktop users domestically. I think that distinction is important. This is a company with strong long-term growth fundamentals and is experiencing a bit of a plateau after astronomical growth resulting from the pandemic.

Can this company get back to its pandemic-driven growth levels? Time will tell. However, those bullish on the long-term fundamental catalysts underpinning this stock may like where it's trading at right now.

Match Group (MTCH)

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One company I view as a pandemic-induced success on one hand, and a pandemic reopening play on the other, is Match Group.

This leading online dating platform has shown impressive growth of late. The company's revenue growth last year came in at 17%, with revenue touching $2.4 billion. That's impressive. Perhaps even more impressive is the company's bottom line performance, with net income for 2020 coming in at $746 million.

Analyst estimates for what 2021 will bring vary. However, I think investors have reason to remain bullish on this company's near-, medium- and long-term outlook.

Well, this is an online dating play with among the best world-class brands out there. Match owns Tinder, PlentyOfFish, Match.com (of course), among many other prominent sites. Accordingly, investors get a broad, targeted exposure to this sector with this conglomerate.

Indeed, those bullish on the potential of the online dating scene to pick up may want to consider Match at a discount of roughly 10% from its all-time highs. This isn't a company that goes on sale often (which is great for bulls), so averaging your way in could be the best way to gain exposure to this name.

Doordash (DASH)

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With the pandemic came restaurant closures. A nightmare many of us would prefer to forget about (and still ongoing in certain places), these restaurant closures provided booming growth for food delivery companies. Among the key beneficiaries close to home has been Doordash.

This online food delivery platform connects consumers with restaurants and coordinates pickups and delivery of orders. A business model that forced many investors and consumers to once ask "why?" has become a staple of everyday life for so many of us.

Accordingly, like many of the companies on this list, investors need to ask if they see a long-term future for this stock. Those who believe the traditional restaurant model has officially been disrupted need not worry.

Those concerned that delivery services will continue to decline as consumers choose in-person dining over dinner at home may want to look elsewhere.

Personally, I think Doordash provides a service that creates utility for its consumer base. Competition remains the concern for me, given the number of competing food delivery services, particularly in regional markets.

That said, this is a company that has managed the recent bloodbath well and is still positioned for growth. Investors looking for a high-risk, high-reward bet may want to consider this stock.

On the date of publication, Chris MacDonald 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.

Chris MacDonald's love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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