Bull Markets and Beyond: 2 Stocks Just Waiting to Soar

The bull market of the past few years has been an enviable run. Despite some setbacks along the way, many quality stocks have performed strongly as overall investor sentiment has improved. While concerns about the global economy, inflation, interest rates, and other factors can mean volatility for companies across a variety of sectors, quality companies are well-positioned to weather market peaks and troughs.

If you are looking for the best stocks to invest in and hold for the long term, I recommend two competing stocks that have the potential to deliver high returns over the long term.

1. Vertex Pharmaceuticals

Vertex Pharmaceuticals (VRTX -2.72%) While the new bull market hasn’t seen the crazy price surges that other stocks have seen, the stock is up about 17% since the beginning of the year. SNP500 In the same period.

The company had success with its cystic fibrosis treatment, generating billions in sales and profits and becoming a market leader in rare disease drugs.

Vertex, now known as Casgevy, received regulatory approval in the United States late last year, becoming the first CRISPR therapy ever approved. The gene-editing therapy is a one-time, functional treatment for two rare blood disorders and is estimated to have a peak sales potential of several billion dollars per year. Launches are underway worldwide, including in the United States, the European Union, and the United Kingdom.

Vertex is also considering launching several other drugs with blockbuster potential in the coming years. One notable example is a novel cystic fibrosis treatment that management believes could set a new standard of care for the genetic disorder. Vertex already dominates the cystic fibrosis drug market with existing treatments, including its flagship drug Trikafta, which is expected to generate sales of nearly $9 billion in 2023 alone.

The new drug is a triple-combination regimen that is taken once a day instead of twice a day like Trikafta, and it appears to be better at reducing chloride in sweat. (People with cystic fibrosis have a defect in a protein found in various tissues, including sweat glands, that prevents them from effectively processing and absorbing chloride in their sweat.)

By some estimates, the new triple-combination regimen could have a peak revenue potential of close to $10 billion per year. The U.S. Food and Drug Administration is reviewing Vertex’s new drug application for patients ages 6 and older, with a review period scheduled to end in January 2025.

UK and EU regulators are also reviewing the drug for approval. The treatment may not only benefit existing Vertex patients or new patients in the cystic fibrosis patient population. More than 6,000 patients have had to discontinue medications in the current portfolio.

Vertex is also developing treatments for cystic fibrosis. Modern This will allow us to expand access to the drug to an additional 5,000 patients who cannot take their current prescription medication.

In addition to cystic fibrosis, Vertex is developing stem cell therapies that could potentially be a functional treatment for type 1 diabetes, and has already submitted a regulatory submission for its non-opioid drug candidate, sujitrizine, for the treatment of moderate to severe pain.

There’s a lot to like about where Vertex is as a business and where it’s going. The company had about $10 billion in cash and investments at the end of last quarter, and it generated $2.7 billion in revenue in the three-month period alone.

While most of that total came from Trikafta (which has patent exclusivity until 2037), Vertex is working to diversify its product portfolio and revenue streams to move away from its dependence on this drug. Investors looking to profit from this growth trajectory will find now to be a good time to get a piece of the action.

2. Pinterest

Pinterest (leg -0.46%) The stock has been in the red since early 2024, but is up nearly 16% from a year ago. The photo-sharing and discovery platform has weathered volatile growth over the past few years since its initial surge in the pandemic.

With many people stuck at home, scrolling the internet and shopping online, advertisers have been pouring money into the pandemic in waves. Pinterest’s user growth has exploded, and the platform, which serves as prime advertising real estate for a variety of industries, has benefited significantly.

Then the bottom came. With changing shopping habits and a tough economy, many advertisers had to cut back on spending, and the Pinterest platform experienced an unusual period of expansion and unfavorable growth comparisons. User growth slowed across the board, and as people went back out into the world, advertising spending declined, leading to a significant drop in revenue and profitability.

So what’s the situation now? While the macro environment remains challenging for both small and large brands, the trajectory of ad spend has recovered from the downturn and is expected to continue accelerating.

While we shouldn’t expect pandemic-level growth, Pinterest has seen steady user and revenue growth, and in its most recent quarter, it posted a tidy profit under generally accepted accounting principles (GAAP).

Looking at the second quarter of 2024, revenue was $854 million, up 21% year-over-year, and Pinterest’s global monthly active users increased 12%. The company now has 522 million people worldwide using the platform each month for inspiration. Profit for the three-month period totaled $9 million, and adjusted income was $180 million.

Pinterest had about $2.8 billion in cash and investments at the end of the most recent quarter, and management expects third-quarter revenue to grow 16% to 18% year over year, falling to between $885 million and $900 million.

With Pinterest’s goal of making every “pin” shoppable and its steady user growth, there’s plenty of room for this business to operate, even if growth is slower than it was a few years ago. Investors will find that buying a few shares at a discount can be a good move.