Whether you’re new to investing or have been in the stock market for a while, it’s always a good time to put cash to work into quality businesses. Finding the right stocks for your portfolio takes time, research, and patience, and great returns don’t usually happen overnight.
However, if you stick with great companies amid market highs and lows while putting your cash to work no matter what the market is doing, you can steadily grow your portfolio without relying on flawed strategies like marketing timing.
If you’re looking to put some of your hard-earned savings into stocks this month and have a smaller wad of cash, like $200, to invest, here are two top stocks to consider for your buy basket right now.
1. Pfizer
Pfizer (NYSE: PFE) isn’t giving investors the returns they became accustomed to in the days of its pandemic-era growth, but that doesn’t mean this is a one-and-done business.
The company was one of the largest pharmaceutical entities in the world long before the COVID-19 pandemic struck. While growth had slowed in the years leading up to the pandemic, and the development of the blockbuster COVID-19 vaccine Comirnaty and oral antiviral medication Paxlovid injected a new wave of growth into Pfizer’s business, this type of cyclicality is not uncommon for a company of this size, scale, and maturity.
Pfizer brought in record profits and sales on the back of its COVID-19 products, and in 2022, it became the first in the history of Big Pharma to top $100 billion in annual sales. Knowing that COVID-19-related sales would inevitably wane and that patent cliffs for several core products were approaching in the latter part of the decade, Pfizer’s management immediately got to work using that windfall of cash and profits to drive a series of strategic acquisitions.
These purchases included biopharmaceutical assets like Arena Pharmaceuticals, Global Blood Therapeutics, and Seagen. These numerous multibillion-dollar acquisitions all boosted Pfizer’s portfolio and pipeline, but cancer drugmaker Seagen looks to be one of the most monumental of these acquisitive efforts. Pfizer’s $43 billion purchase of Seagen was the single largest transaction in the biopharma industry in about four years.
The addition of Seagen to Pfizer’s already extensive oncology program was notable, partly because it doubled the company’s pipeline and added four new approved cancer drugs to the mix. Now, management plans to have eight or more potential blockbusters from its cancer drug portfolio out by the year 2030 and is focusing on expanding its footprint specifically in various forms of breast cancer, genitourinary cancer, hematology-oncology, and thoracic cancer. Management estimates that the Seagen acquisition alone is on track to add an additional $10 billion to Pfizer’s annual revenue by 2030.
In the first quarter of 2024, Pfizer brought in revenue just shy of $15 billion. That figure was down double digits from the prior year’s quarter due to declines in sales of Paxlovid and Comirnaty. However, if you remove those two products from the mix, revenue actually rose 11% from one year ago, a healthy clip for a mature business. Revenue from Pfizer’s Vyndaqel family of drugs rose a whopping 66% in the first quarter of 2024. Meanwhile, anticoagulant blockbuster Eliquis saw revenue jump 10% year over year, while the company’s Prevnar family of vaccines generated 7% higher revenue than one year ago.
While investors may need to be patient as Pfizer integrates these new acquisitions into its growth story and moves on from its pandemic successes, this isn’t a company that is on its way out. It is still profitable and had about $12 billion in cash on its balance sheet at last count. Pfizer also consistently raises and pays its dividend, which incidentally now yields just shy of 6% as shares have been pummeled by the market.
Its dividend is $0.42 per share, or $1.68 on an annual basis. For investors seeking dividends, an established pharmaceutical leader, and robust growth potential over the long term, a multi-year investment in this stock still looks like a good idea.
2. Fiverr
Fiverr International (NYSE: FVRR) has also not been getting much favor from investors lately, but that could be a short-sighted look at the potential of this business.
While this company caught the attention of many investors during the pandemic, the gig economy is an explosive growth sector of the global labor force that is set to continue expanding in the years ahead. One study by Business Research Insights projects that the global gig economy will hit a valuation of around $1.9 trillion by the year 2031. That’s a compound annual growth rate of about 16% from its 2021 valuation.
Fiverr’s platform makes it easy for small businesses as well as larger organizations to connect with freelancers to perform any number of tasks they need, from voiceover work to administration to legal document preparation to copywriting. For a freelancer, the ability to have time and location independence while partnering with clients around the world is a compelling value proposition. Some investors might be worried that Fiverr’s growth prospects could be limited by the broader adoption of artificial intelligence-based tools, but this is just one piece of the pie.
The company has been aggressively fine-tuning its platform to capitalize on the demand for AI-centric projects and services without undermining the need for talented human workers. In fact, complex services, which are tasks where human skills are needed to utilize the power of AI effectively, are growing at a double-digit rate on the Fiverr marketplace. These complex services not only tend to drive higher spending by buyers of freelance gigs, but now account for two-thirds of all transactions on Fiverr’s platform.
New AI services like avatar design are growing in popularity among both freelancers and buyers, and Fiverr had more than 10,000 freelancers considered to be AI experts on its platform at the close of the first quarter. This growth in AI-driven, complex, and higher-value services is driving spending per buyer upward and accelerating Fiverr’s financial growth.
Revenue in the first quarter of 2024 totaled just shy of $94 million, up 6% from one year ago. While active buyers were down single digits year over year, spending per buyer jumped 8% from the same quarter in 2023. Fiverr also reported $0.8 million in net income in the three-month period, compared to a $4.3 million net loss in the year-ago quarter. On an adjusted earnings basis, Fiverr delivered $16 million on that front in the three-month period.
The company is contending with a still-challenging environment as companies are cautiously spending and hiring initiatives remain decelerated in some industries. However, in economic periods where these trends are more prominent, the ability to work with freelance professionals or even a team of freelancers can be even more attractive to these organizations.
Fiverr’s expansion of its higher-quality services, AI-focused gigs, and offerings for larger companies, such as the curated selection of freelancers and services found on its Fiverr Pro platform, are all helping the business stay competitive in a tough landscape. Forward-thinking investors might want to consider taking even a small position to capitalize on the potential of the gig economy and Fiverr’s footprint in that world.
Should you invest $1,000 in Pfizer right now?
Before you buy stock in Pfizer, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pfizer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $692,784!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
See the 10 stocks »
*Stock Advisor returns as of July 22, 2024
Rachel Warren has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Fiverr International and Pfizer. The Motley Fool has a disclosure policy.
2 Unstoppable Growth Stocks to Buy Right Now for Less Than $200 was originally published by The Motley Fool
Credit: Source link
