It’s been a rough past four weeks for investors. All told, the Nasdaq Composite is now down 12% from its mid-February high. Plenty of stocks are doing even worse, too, in some cases adding to weakness they were already suffering prior to the market’s current rout.
The fact is, however, for true long-term investors, the Nasdaq’s steep sell-off is far more of an opportunity than a reason to panic. More to the point, savvy investors should be using this sweeping pullback to step into good growth stocks at a great discount.
With that in mind, here’s a closer look at three of the best buys in the midst of the current carnage.
Shares of advertising technology outfit The Trade Desk (NASDAQ: TTD) aren’t just down in step with the Nasdaq Composite’s recent correction. Thanks to this week’s stumble, this ticker’s down more than 50% from last month’s high. Its fourth-quarter revenue reported in February came up short of expectations, as did its first-quarter sales guidance. It was the first time in years the company would miss its own top-line forecast as well as analysts’ collective outlook. Investors understandably panicked. Threats of a recession kept them in panic mode in the meantime.
As is so often the case, though, the emotionally charged sell-off overshot its target by factoring in too much fear and not enough long-term reality. While the company is undeniably on the defensive because of challenging internal and external circumstances, the fact is, its response to both is an encouraging one.
Part of this revitalization plan includes December’s restructuring of its corporate hierarchy to reflect the way brands and advertising agencies now purchase programmatic ad inventory, including direct purchases from brands themselves. Its connected-television ad customers may encounter a distinctly different buying experience than its web or audio customers do, for instance. The Trade Desk is adapting to a technology-focused landscape where middlemen are becoming obsolete, by offering clear value and simplicity as a new kind of intermediary.
Perhaps the top growth opportunity that most investors just aren’t recognizing right now, however, is the looming shakeup and shakeout of the web advertising arena itself. As CEO Jeff Green commented during February’s Q4 earnings call, “We are preparing for a world where Google exits the open internet,” alluding to the regulatory pressure that Alphabet is increasingly feeling that will eventually remove it as a direct advertising-technology competitor to The Trade Desk. In the meantime, the company continues to lead the ad-supported connected-TV market that’s still growing like gangbusters.