Over the past year, the market has taken investors on a wild ride, swinging between highs and lows. No matter what happens in the coming weeks or even months, history has shown that those who stay in the market and continue investing in great businesses reap the rewards over time.
While many growth-oriented companies continue to struggle with a bearish environment, every past bear market has not only recovered but eventually exceeded previous highs. If you’re looking for two fantastic stocks to add to your portfolio before the next bull run begins, here are two names to consider.
1. Vertex Pharmaceuticals (NASDAQ: VRTX)
Vertex Pharmaceuticals has demonstrated resilience in a volatile market. Over the past year, while the S&P 500 posted a negative return of about 10%, Vertex’s stock has delivered double-digit gains. The company’s strength in difficult conditions comes from the robust demand for its core business.
Vertex is the only company with treatments that address the underlying cause of cystic fibrosis (CF). In the U.S. alone, its CF drugs cover over 90% of all CF patients, making its demand steady and sustainable. Over the past five years, Vertex’s revenue has surged by 193%, while profits have grown by 58%.
Beyond its profitable CF portfolio, Vertex is expanding into new markets with a strong pipeline of drugs targeting other rare diseases:
- Two stem cell therapies for Type 1 diabetes
- The first-ever drug (if approved) for APOL1-mediated kidney disease
- A non-opioid pain treatment candidate
- Two CRISPR-based gene-editing treatments offering a one-time functional cure for rare blood disorders
Notably, its gene-editing therapy Exa-cel has already been submitted to the FDA, as well as regulators in the EU and the UK, making an approval possible this year. Investors looking for a high-growth healthcare stock with a strong pipeline and market dominance should take a serious second look at Vertex.
2. Lululemon Athletica (NASDAQ: LULU)
Lululemon has evolved into a household name since its founding over 20 years ago, known for its trendy and high-quality athletic apparel. Despite economic uncertainty and concerns about consumer spending, Lululemon continues to thrive as customers willingly pay for its premium, versatile products.
The athleisure market is expected to reach $663 billion globally by 2030, offering Lululemon a massive runway for future growth.
For investors looking to capitalize on this industry’s growth potential, Lululemon presents an increasingly attractive opportunity. In a period when many consumers are cutting back on discretionary spending, Lululemon’s brand loyalty, strong omnichannel presence (both online and in-store), and highly wearable products continue to drive revenue and profit growth.
In 2022, Lululemon reported an impressive 30% year-over-year revenue growth, reaching $8 billion in sales.
- Comparable store sales increased by 19%
- Direct-to-consumer sales grew by 35%, making up 46% of total revenue (up from 44% in 2021)
Although profits dipped slightly compared to 2021 due to non-cash impairment charges from a past Mirror acquisition, Lululemon still delivered $855 million in net earnings in 2022. The company also maintains a healthy balance sheet with $1.2 billion in cash.
Lululemon is actively executing its Power of Three x2 Growth Plan, which aims to double 2021 revenue to $12.5 billion by 2026. Investors who ride this wave stand to benefit from substantial stock returns along the way
