Buy the Dip: 3 stocks to buy in April and hold for the next 3 years

So far, 2022 has been a roller coaster for investors. the S&P500 hit an all-time intraday high in early January, but closed the first quarter of the year with its biggest quarterly decline in nearly two years. Individual stocks, of course, also plunged. While that’s scary, you could create a lot of long-term wealth if you buy the dip, provided you know where to look. Here are three obvious stocks that have fallen in recent months that you would want to buy now and hold.

The growth potential here is undeniable

Caught up in the liquidation of growth stocks, Assets received ( UPST -1.77% ) the stock has lost more than a third of its value this year and 66% of its value in the past six months, at the time of this writing. It’s true that Upstart’s shares have soared too high too fast, but it’s also true that the company is growing rapidly and sitting on trillion-dollar opportunities. If you believe in Upstart’s growth story, now is the time to buy.

Upstart uses artificial intelligence to analyze over 1,000 data points per borrower to filter them and assess loan risk. So while lenders like banks can use Upstart’s services to offer low-risk loans, potential borrowers can get fast loans at low rates. It’s a win-win for both parties. Much of the process is automated, and Upstart also does not have to bear any credit risk as it does not lend money, but only helps create loans in exchange for a fee.

Upstart’s 2021 numbers show stunning growth:

  • Revenue up 264% to $849 million.
  • Operating profit up 1,097% to $141 million.
  • Net income up 2,164% to $135 million.

Such high growth rates may not be sustainable, but Upstart will not stop growing given the markets it targets. After unsecured personal loans, Upstart has already taken out auto loans and tapped top automakers like volkswagen as initial customers. Upstart is then targeting small business and small business lending, and plans to launch into mortgage lending in 2023.

Image source: Getty Images.

The mortgage market alone is worth at least $4 trillion based on originations, when the auto loan market is worth more than $700 billion. That’s huge, and one of the main reasons why Upstart stocks look so attractive right now.

This megatrend could make early investors rich

If you’re never sure where to start when it comes to investing, look for megatrends or structural shifts that could alter the dynamics of an industry. Even better if the industry is essential to the economy. And then find the best players ready to ride the megatrend. Example: renewable energies and Brookfield Renewable Partners ( BEP -0.37% ).

In the United States alone, solar and wind accounted for 80% of electrical capacity addition in 2020, up from less than 30% in 2010, according to Statista. Brookfield Renewable is one of the world’s largest pure-play renewable energy companies with a portfolio spanning hydroelectric, solar, wind and battery storage businesses in North America, America South, Europe and Asia.

A bar chart showing electricity capacity addition in the United States by fuel resource type from 2010 to 2021.

Brookfield Renewable achieved record funds from operations (FFO) per unit in 2021 and ended the year with a massive 62 gigawatts (GW) global development pipeline, including 15 GW in late-stage development. It also had $4.1 billion in cash at the end of 2021 to invest in growth. What I really like about the company, however, is its strategy of recycling capital, or simply selling assets as they mature and opportunistically reinvesting the proceeds in assets with potential of higher yield. Brookfield Renewable has performed well so far thanks to its FFO growth.

With FFO, shareholder returns have also increased – between 2013 and 2022, Brookfield Renewable’s dividend has grown at a compound annual growth rate (CAGR) of 6%.

The company is targeting 5-9% annual dividend growth over the long term, which, combined with Brookfield Renewable’s 3% dividend yield, gives you an 8% return almost immediately if you own the stock. With the Russian-Ukrainian conflict driving up oil and gas prices and forcing more countries to switch from fossil fuels to renewables to meet future energy needs, the rise in Brookfield Renewable stock looks stronger than ever.

First mover in an industry with exponential growth potential

Teladoc Health ( DOC 3.68% ) is another title that has been hammered but has solid growth potential. Teladoc is the world’s largest telehealth company and offers virtual primary care and chronic disease management services.

It is true that the COVID-19 pandemic has been a major driver of the telehealth market and Teladoc’s growth pace will likely slow as economies open up. Yet the global telehealth market was worth an estimated $144.4 billion in 2020 according to Fortune Business Insightsand most research companies expect it to grow at least 30% CAGR in the next few years.

TDOC Chart

TDOC given by Y-Charts

Teladoc, for its part, expects its revenue to grow at a CAGR of 25-30% between 2021 and 2024. The company generated $2 billion in revenue in 2021, up 86% from 2020 Visits to its platform increased 38% to 15.4 million. Last year.

Following its standout acquisition of chronic disease management company Livongo in 2020, Teladoc is now focusing on other high-potential areas like mental health and targeting higher revenue per member through multiple product offerings. In fact, more than 40% of Teladoc members had access to multiple products in 2021 compared to less than 10% in 2017, including primary care, general medicine, mental health, expert medicine, nutrition and dermatology.

There is ample room and multiple growth levers for Teladoc, and the stock has fallen so hard so fast that it’s hard to argue with the current price.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.

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