Don’t Wait for a Market Crash to Buy These 2 Growth Stocks

Predicting what the stock market will do next is impossible, but it doesn’t stop people from trying. Investors often trade way too much, hampering the potential for compounding to work its magic in the pursuit of satisfactory long-term returns. The best strategy, therefore, is simply to buy great businesses and plan to hold through the inevitable ups and downs. 

There are two thriving consumer-facing businesses that investors should consider owning today. In fact, you don’t even need to wait for a market crash before buying shares in these growth stocks. 

Riding the comfort trend 

With sales gains accelerating over the past four quarters, Crocs (NASDAQ:CROX) is experiencing unprecedented growth thanks to consumers’ heightened focus on comfort. In the most recent quarter, revenue soared 93.3%, as Crocs registered record sales of $641 million in the three-month period that ended June 30. The company’s famous clogs accounted for 74% of business, with sandals and Jibbitz (customizable shoe charms) being other key product categories. 

Crocs has really shown adeptness at boosting its brand relevance, relying on social media and digital channels, as well as influencer campaigns and collaborations, to drive consumer awareness. 

“We were the first footwear brand to market an augmented reality experience on TikTok, with our hashtag #GetCrocd challenge, featuring try-on sandals and clogs with Jibbitz. Globally, this drove over eight billion views and over one million uses of the hashtag,” CEO Andrew Rees said on the earnings call. Crocs also recently worked on partnerships with Justin Bieber and Spanish luxury fashion house Balenciaga. 

Direct-to-consumer revenue, consisting of items moved on the company’s website or through its own stores, represented more than 50% of sales in the quarter. And Crocs’ 61.7% gross margin, which is higher than Nike‘s, is truly remarkable given that the average selling price during Q2 was just $21.84. The operating margin of 30.5% is stellar as well. 

Management believes that Asia, and particularly China, is the next major growth opportunity. Crocs will deploy the same branding and marketing strategy that’s working so well here in the U.S., leaning heavily on digital and social media to drum up interest. 

Crocs is certainly firing on all cylinders today, but investors are right to wonder whether this is just a short-lived pandemic surge or something more sustainable. Based on the smart moves the company is making, this $9 billion mid-cap stock could be winning for a long time. 

Beating its discount-store peers 

You wouldn’t expect a brick-and-mortar retailer to be in this discussion, but Five Below (NASDAQ:FIVE), with its 1,121 nationwide stores and 51.7% year-over-year sales growth, definitely warrants an investment today. The discount store chain’s stock, up 344% over the…