1 Top growth stock to buy for an inevitable bull market
It’s been a tough few weeks for investors. The Standard & Poor’s 500 It’s down 7% over the past two weeks, and Nasdaq Composite It was rejected by more than 8% over the same time frame. The pullback has put the Nasdaq index deep into bear market territory, with the index down more than 25% year-to-date. This market weakness, however, presents opportunities.
At some point, this bear market will reverse. When that happens, investors may benefit from owning the right group of companies – businesses with increased revenues, profits, and attractive valuations. As investors look for good stocks to own in the next bull market, it’s worth looking into trade office (TTD -1.00%). The debt-free, fast-growing digital advertising company is well positioned to succeed – and hopefully – generously reward shareholders.
Strong growth in a challenging environment
While advertisers struggled during the second quarter of the year, demand-side platform (DSP) The Trade Desk was able to thrive. The company’s revenue grew 35% year-over-year. This compares meta pads‘1% consolidated revenue decline and year26% growth in its platform business (down from 39% growth in the first quarter).
Worse, the midpoint of Meta’s third-quarter revenue guidance included a steeper year-over-year decline in that period, and Roku said its consolidated revenue for the third quarter should grow just 3% (down from 18% growth in the second quarter). Meanwhile, the Commerce Bureau directed to increase third-quarter revenue by 28% or more year-over-year.
“The Trade Desk is becoming increasingly indispensable as the default DSP for open internet and connected TV,” said Jeff Green, CEO of the Commerce Office, on the company’s second-quarter earnings call.
Green also explained that uncertain macroeconomic environments ultimately lead to new customer growth and increased market share gains from existing customers because advertisers look to increase every dollar spent on advertising during these times. They need an efficient data-driven advertising platform with access to a variety of repositories to help them get the most out of their advertising spend.
During the first half of 2022 and especially in the second quarter, I think we gained more market share or acquired more land than at any point in our history. This is largely because, as marketers become more concerned with their budgets, they prioritize the ads that generate the highest return.
A good balance sheet for turbulent times
In addition to the strong growth of the trading desk, the company is highly profitable, has a lot of liquidity and does not carry any debt. These are good qualities for investors to look for in their investments during bear markets and, more specifically, uncertain times. Investors need resilient companies during these periods while they hope that the economy will start to show signs of improvement.
The tech company finished the second quarter with about $1.2 billion in cash and cash equivalents and short-term investments, and free cash flow was $86 million in the second quarter alone.
The Bureau of Trade’s market share gains, impressive profitability, and healthy balance sheet highlight why investors might want to buy the shares down 7% over the past two weeks and hold the shares for the long term. If a company can win in this challenging environment, imagine what it can do when advertising budgets come back again. Moreover, it may be wise to buy shares of this stock while the general market remains pessimistic. After all, a stock like this can rise during a bull market.
Randy Zuckerberg, former director of market development and spokesperson for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Daniel Sparks has no position in any of the stocks mentioned. Its clients may own shares in the mentioned companies. Motley Fool has positions at Meta Platforms, Inc. and Roku and The Trade Desk recommend it. Motley Fool has a disclosure policy.