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A bull market is coming. Maybe it will begin this month. Maybe it will be later this year. Perhaps it will take longer. But rest assured that one is on the way sooner or later.
The stocks that tend to perform the best in a new bull market are those with strong businesses and outstanding growth prospects. Here are three unstoppable stocks to buy before the next bull market.
MercadoLibre (MELI -1.12%) is actually performing quite well even without a bull market. Shares of the Latin American e-commerce and fintech company have soared nearly 40% year to date.
The key to MercadoLibre’s strong stock performance is a successful underlying business. The company’s net revenue jumped 41% year over year in the fourth quarter of 2022 to $3 billion. The increase was even higher (56.5%) on a constant currency basis.
E-commerce remains MercadoLibre’s biggest moneymaker. CFO Pedro Arnt said in the Q4 conference call that the company gained market share across all of its Latin American regions, with especially strong growth in Brazil and Mexico. However, MercadoLibre’s fintech operations are growing much faster and could catch up with e-commerce revenue in the not-too-distant future.
There’s still plenty of room for more growth in both businesses. Look for MercadoLibre’s momentum to accelerate if the overall stock market begins a sustained climb upward.
The picture might not seem as bright for MongoDB (MDB -0.67%) at first glance. Shares of the database platform company have risen a little year to date but remain down more than 50% below their 52-week high.
MongoDB’s revenue guidance for fiscal year 2024 was lower than Wall Street expected. The company is also slowing hiring to a crawl because of overall market headwinds. But don’t think MongoDB’s business is flailing.
The company continues to win new customers despite the macro environment challenges. CEO Dev Ittycheria recently revealed that some of MongoDB’s “largest and most sophisticated customers plan to meaningfully increase their MongoDB deployments.” Despite the lower-than-anticipated outlook, the company still expects revenue to increase by 16% in the new fiscal year at the midpoint of its guidance range.
Over the longer term, the database market should continue to grow briskly. MongoDB’s cloud-based platform will almost certainly enjoy strong demand. When a new bull market comes, it’s a good bet that this stock will be one of the big winners.
3. The Trade Desk
The Trade Desk (TTD -0.63%) is the middle-of-the-road pick among this group based on stock performance. Shares of the advertising platform provider have jumped close to 25% so far this year, better than MongoDB but lagging behind MercadoLibre.
However, The Trade Desk certainly isn’t middle-of-the-road compared to other adtech companies. For example, advertising agency Dentsu estimates that total global advertising spending increased by 8% in 2022. The Trade Desk CEO Jeff Green stated in the latest quarterly update that spending on his company’s platform soared by more than 3x that rate.
Despite an overall dismal advertising market last year, The Trade Desk grew its revenue by 32%. The company even reported its highest quarterly revenue ever in Q4. The Trade Desk also remains profitable, just as it has been since 2013.
The Trade Desk benefits from two key trends: the shift to digital advertising and the tremendous increase in ad-supported connected TV. The company’s online platform is ideal for advertisers and ad agencies seeking to take advantage of these trends. The Trade Desk is an unstoppable stock now, but it should be even more successful when a new bull market begins.