Bear markets average nine months. The Fed indicated interest rates would rise, foreshadowing further stock market headwinds. Cyclical and growth stocks could rebound as sentiment improves.
Here are three stocks well-positioned for the next bull market.
Amazon Stocks
Amazon (AMZN) was one of the best-performing corporations in the past, but its returns have declined. Amazon stock (NASDAQ:AMZN) is down 30% year-to-date and 40% from last year’s peak. The stock (NASDAQ:AMZN) has fallen owing to valuation issues, a sales slowdown, and e-commerce losses.
Amazon Web Services (AWS) continues to grow fast and looks to be the company’s main source of wealth. AWS’s second-quarter revenues were $19.7 billion, with a 29% operating margin. Amazon’s e-commerce business will grow quicker when inflation returns and the next bull market begins. AWS will be more prominent, and investors will give Amazon a higher multiple. Winning appears likely.
PayPal Stocks: Cash War Winner
Like Amazon, PayPal (PYPL 1.77%) benefited when consumer spending shifted online via e-commerce. Due to tough comparisons, the company’s growth has stalled, hurting the stock. PayPal stocks (NASDAQ:PYPL) are down 54% year to date and more than 70% from their high last year; investors are worried about a recession and PayPal’s sluggish growth speed.
Second-quarter revenue rose merely 9% to $6.8 billion. CEO Dan Schulman projected a second-quarter performance slump.
As a cyclical payments stock, PayPal’s company and stock price should return in the next bull market. PayPal’s price-to-earnings (P/E) ratio of 22 is just marginally higher than the S&P 500 based on this year’s expected profits per share.
PayPal still has an opportunity for growth, and its earnings multiple could rise if investor confidence returns.
3. Carvana Stocks: The Online Auto Dealer
Carvana (CVNA), an online used-car dealer, is a volatile stock. During the epidemic, the stock surged 1,000% before falling 90%. Slow growth, sky-high used-car pricing, and an unprofitable business plan led the market to predict the company’s demise. NACV (NYSE: CVNA)
Carvana is susceptible to the macroeconomic climate, but higher interest rates may help it.
A normalized used-car market would make it easier for Carvana to price the automobiles it buys and sells. Even though rising interest rates are expected to reduce demand for used cars, Carvana can improve revenues through its financing services.
Carvana stock will likely suffer as long as the bear market continues since it faces several threats if a recession happens. However, those risks seem to be priced in, as the firm trades at a price-to-sales ratio of 0.17.
If Carvana can survive the next several quarters, its upside potential in the next bull market may be huge, given its dominance in the online used-car business. Another multi-bagger is possible if it can reaccelerate revenue growth and control expenditures.
Featured Image – Megapixl © Savcoco
Author Okoro Chinedu 
