But as I pointed out with Mastercard, periods of economic expansion handily outlast recessions. For long-term investors, this is a numbers game that’s very much in their favor. No matter what the U.S. economy dowmarkets throws consumers’ way, patients will still need prescription medicine. This suggests that BioMarin Pharmaceutical’s operating cash flow can remain strong and predictable in any economic climate.

1. But as I pointed out with Mastercard, periods of economic expansion handily outlast recessions.
2. In an interview on Tuesday, Lee told CNBC that small cap stocks could soar as much as 60% this year thanks to compelling valuations relative to the S&P 500.
3. The gains show that investors have overcome fears of rising interest rates and panic about a recession that had governed stock trading for much of the past two years.
4. One says a bull market is confirmed when a major index like the S&P 500 climbs 20 percent above its most recent low.

While this does represent quite the premium to the broader market, a projected 43% annualized earnings growth rate over the next five years should more than make up for these concerns. While a decline in the growth-stock-fueled Nasdaq Composite over the past 26 months may not be what short-term traders expected, it’s music to the ears of long-term-minded investors. While a number of broader stock market indexes surge toward record highs Monday, market internals suggest investor buying is almost as calm, cool and collected as can be. A fourth marvelous growth stock you’ll regret not buying in the wake of the Nasdaq bear market dip is social media giant Meta Platforms (META 1.95%). What follows are four marvelous growth stocks you’ll regret not buying in the wake of the Nasdaq bear market dip.

Instead, an independent Wall Street Journal commission decides whether a share is to be included or excluded. There are no fixed times for reviewing the composition of the index, since changes are only made by the commission as and when they are needed. The shares included in it are weighted according to price; the index level represents the average of the shares included in it. “Small caps relative to the S&P 500 on a price-to-book basis is back to where it was in 1999, which was the absolute low and was a launch point of 12 years of outperformance for small caps,” Lee said. The Russell 2000 trailed the S&P 500 significantly in 2023, gaining about 17% compared to a gain of about 24% for the large cap index.

Only three of the one dozen recessions since 1945 have lasted at least a year, with none surpassing 18 months. Since expansions typically last multiple years, companies like Mastercard are often thriving. One says a bull market is confirmed when a major index like the S&P 500 climbs 20 percent above its most recent low. By that standard, the bull market was confirmed in June, when the S&P 500 closed 20 percent above its October 2022 low. It doesn’t mean stocks will continue to rise indefinitely, but it does reflect a generally optimistic outlook on Wall Street. The inclusion of a company in the Dow Jones Industrial Average does not depend on defined criteria.

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As a predominantly fee-based business, Mastercard would struggle during a recession. The top concern for financial stocks like Mastercard is that they’re cyclical. There is no governing body that says what it is, or decides when it started (as there is with a recession). Instead, they’re now betting that a drop in rates will help expand corporate profits, while the economy stays on a relatively solid footing.

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If so-called breadth improves in the stock market, then small cap stocks should catch a bid, Lee said in his 2024 outlook. Even after quadrupling from its bear market lows in 2022, Meta stock remains historically cheap. Shares can currently be purchased for about 12X forward-year cash flow, which represents a 22% discount to the average cash flow multiple Meta has traded at over the previous five years.

Get this delivered to your inbox, and more info about our products and services. The University of Michigan’s consumer sentiment gauge surged in January to 78.8, the highest since July 2021, from 69.7 in December. Consumer sentiment surged in January as year-ahead inflation expectations dropped to the lowest level since December 2020, fueling rate-cut hopes. Bitcoin’s price has soared 150% over the 14 months since Sam Bankman-Fried’s crypto empire imploded.

The Big 3 stock market indexes toward their first closes below their widely followed 50-day moving averages for the first time in six weeks. Many chart watchers on Wall Street view the 50-day moving average (50-DMA) as a … The biggest argument skeptics can bring to the table for BioMarin is that shares are currently pricey. On a trailing-12-month (TTM) basis, investors are paying north of 120 times earnings.

As a result, the company typically enjoys exceptional ad-pricing power. Though BioMarin has more than a half-dozen approved therapies, its dwarfism drug Voxzogo is making the biggest impact. Voxzogo sales more than tripled through the first nine months of 2023, when compared to the prior-year period, and have the potential to eventually top $1 billion in peak annual sales. New drug launches, coupled with organic growth from existing therapies, have put BioMarin on a path to double its full-year sales to north of $4 billion by 2027.

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Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. Finally, an expansion in economic growth could be a “huge tailwind” for small cap stocks as they are highly exposed to the domestic economy. Second, small cap stocks are highly levered and tend to have a higher cost of capital, so a decline in interest rates should benefit small cap stocks much more than large cap stocks. An overlooked area of the stock market is set to soar in 2024 after significantly underperforming the S&P 500 last year, according to Fundstrat’s Tom Lee. The first exceptional growth stock that’s begging to be bought with the Nasdaq Composite still notably below its record high is payment facilitator Mastercard (MA 1.41%). Yet in spite of this sizable bounce from the 2022 bear market lows, the high-flying Nasdaq Composite remains more than 7% below its all-time high, which was set in November 2021.

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Meta’s operating cash flow and balance sheet are additional reasons this stock is a surefire buy. Despite widening losses from virtual and augmented reality segment Reality Labs, Meta still generated $51.7 billion in net cash from its operations through the first nine months of 2023. When coupled with its greater-than $61 billion in cash, cash equivalents, and marketable securities, it’s clear the company has the luxury of taking risks on next-big-thing investment trends.

But the Dow was still below the widely followed 50-day moving average (50-DMA), which many … Thankfully, Meta Platforms has easily identifiable catalysts and moats working in its favor. For example, Facebook, Instagram, WhatsApp, and Facebook Messenger collectively helped the company attract close to 4 billion monthly active users during the September-ended quarter. Businesses are keenly aware that no social media platform offers them access to more eyeballs than Meta’s top-tier social media real estate.

In an interview on Tuesday, Lee told CNBC that small cap stocks could soar as much as 60% this year thanks to compelling valuations relative to the S&P 500. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Not to sound like a broken record, but the fear of a recession could be the biggest monkey on Meta’s proverbial back in the new year. Meta generates in excess of 98% of its revenue from advertising, and advertisers are known to pare back their spending at the first signs of trouble. “The outlook for both short term rates and mortgage rates is now decidedly lower than what we had previously forecast.” The Dow Jones Industrial Average rallied 133 points, or 0.6%, in midday trade, to extend its bounce off the Dec. 24 low to 11.0%.

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To add to the above, Mastercard’s management team has made the wise decision to steer clear of the lending space. Though the company would probably excel as a lender, economic downturns would expose it to loan losses that require capital to be set aside. Not having to set aside capital is a competitive advantage that supports the company’s 40%-plus profit margin and allows it to bounce back from recessions faster than most lending institutions. A number of stock market indexes produced bullish technical patterns by closing above their April highs Wednesday, joining the Russell 2000 Index which .

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Year-to-date, the Russell 2000 is down about 7% compared to a 1% drop for the S&P 500. BioMarin’s competitive edge is that it focuses on developing therapies for patients with ultrarare diseases. Though there are monetary risks involved with developing drugs targeting a small pool of patients, there are also ample rewards for approved therapies. Health insurers rarely push back on high list prices for rare-disease drugs, and there’s usually little competition. With a couple of money-focused metrics and predictive tools forecasting a U.S. recession in 2024, there’s the genuine possibility that consumer and enterprise spending could taper as the year wears on.