2 Top Growth Stocks the Smartest Investors Are Buying Before the Next Bull Market

A handful of professional money managers actually do this job. S&P 500The broad-based index is seen as the benchmark for the entire U.S. stock market. But Jason Kritzer of Eaton Vance Management and William Harnisch of Peconic Partners have both overcome the benchmark index over the past four years. That makes them a great source of inspiration.

Harnisch, for example, held more than twice of his positions. PayPal Holdings (PYPL -1.14%) Since the beginning of 2022, as Kritzer has steadily added to his stock in CrowdStrike Holdings (CRWD -0.69%). Those purchases were significant as both stocks fell as cloud storms rallied. On the economy. In fact, PayPal and CrowdStrike each saw their share price drop 78% and 65%, respectively.

However, both stocks are well positioned to recover during the next uptrend, so smart investors like Kritzer and Harnisch see the downtrend as a buying opportunity.

1. PayPal: A brand name that is synonymous with digital payments.

PayPal is the most accepted digital wallet in North America and Europe and ranked as the most downloaded mobile financial app worldwide during the first half of 2022, according to Apptopia. That success comes from its two-part network. Most payment providers only work with merchants, but PayPal has established a two-way relationship of transactions, giving companies a data advantage.

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On the other hand, PayPal has a deeper understanding of consumer spending patterns, which means it can fight fraud more effectively and boost sales for merchants. In addition, because it builds trust with buyers and sellers, businesses that offer PayPal when withdrawing money see higher conversion rates and more repeat purchases. In fact, PayPal improves conversions by 34% over other payment options, according to CEO Dan Schulman.

That benefit has been translated into strong financial results on a consistent basis, and despite the recession, PayPal recently released strong third-quarter earnings reports. Revenue rose 11% to $ 6.8 billion and free cash flow increased 37% to $ 1.8 billion.

Better new partnership with Apples And Amazon Should help PayPal gain market share in the future, both physically and digitally. US users can now pay with Venmo on Amazon and they will be able to add PayPal- and Venmo-branded cards to their Apple Wallets starting in 2023. Those partnerships could be a rolling pin because Amazon dominates US e-commerce and Apple Pay is one of the most popular in-store payment options. US consumers.

With that in mind, PayPal puts its total resolvable market at $ 110 trillion, leaving plenty of room for future growth. And with stock trading at 3 times the lowest price since 2015, now is a good time to buy this growing stock.

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2. CrowdStrike: Unmatched Internet Security Software

CrowdStrike offers 23 different products that address multiple vertical issues of the cyber security industry, unifying endpoints, cloud workloads, identity and data protection across a single platform. Moreover, those products are distributed through a single software agent that can be installed without having to restart the device. That unique quality makes CrowdStrike stand out from the rest of the vendors, which usually have a load on the device and complicate the process with multiple agents and interfaces.

All in all, CrowdStrike reduces costs and complexity by allowing customers to standardize on a single online security platform, and it simplifies adoption with its single agency architecture. Better yet, CrowdStrike has designed its platform to capture data on an incomparable scale, giving its artificial intelligence machines the unique power to thwart threats. Not surprisingly, the company has attracted the attention of industry analysts over and over again.

Research and consulting firm Frost & Sullivan recently named CrowdStrike as a leader in protecting cloud-based applications and threat intelligence. “CrowdStrike leads the industry in the implementation of artificial intelligence / machine learning to ultimate security, as well as providing unparalleled protection against viruses and virus-free attacks,” it said.

Not surprisingly, the company is growing rapidly. CrowdStrike increased its customer base 44% to 21,146 in the third quarter, and the average customer increased spending by more than 20% in the previous year. Driven by the composite effect, third-quarter earnings rose 53% to $ 581 million and non-GAAP net income rose 135% to $ 0.40 per deferred share.

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CrowdStrike is positioned to maintain that momentum in the coming quarters and years. The company estimates its resolvable market at $ 76 billion by 2023, but its product roadmap could push that figure to $ 158 billion by 2026. On that note, CrowdStrike has consistently demonstrated remarkable capabilities for innovation. While the company offers 23 software products today, its platform includes only 10 software products when it goes public in 2019. That should give investors confidence.

The stock is currently trading 11.6 times, the lowest price in the company’s history. That creates great buying opportunities for long-term investors.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of the Motley Fool Board. Trevor Jennewine has positions in Amazon.com, CrowdStrike and PayPal. Motley Fool positions and introduces Amazon.com, Apple, CrowdStrike and PayPal. Motley Fool recommends the following options: Long March 2023 $ 120 calls to Apple and short March 2023 $ 130 calls to Apple. Motley Fool has a demonstration principle.

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