2 Stocks to Invest $500 in Before They Soar

2 Stocks to Invest $500 in Before They Soar

Don’t let the next bull market leave you behind.

What goes up must come down, and in the stock market, the reverse also applies: No matter how much equity indexes drop, they will eventually recover. Bull markets last longer than bear markets. Despite how scary things look right now — with the S&P 500 recently hitting a two-year low — there is hardly a better time to make money in the stock market by investing during a downturn.

But where should investors put their hard-earned money? Here are two beaten-down stocks worth investing $500 in right now: Netflix ( NFLX -0.73%) and Pinterest ( PINS 3.78%). 1. Netflix

Many seem to think that Netflix’s best days are behind it. Investors have sold off the company’s shares over the past year leading to a catastrophic performance for the streaming specialist in this period.

There is some logic to this thinking. Netflix’s issues are real. Whereas it had little competition in the streaming space in the 2010s, there are now too many competing platforms to count. Netflix’s revenue growth has slowed considerably. It is leaving money on the table as a result of password sharing. And Netflix lost subscribers on a year-over-year basis during the previous two quarters.

There is also a silver lining: Netflix’s shares look relatively cheap now, substantially more than they were about a year ago when the company was still riding the wave of its pandemic-induced success. Speaking of the pandemic, it also helps explain the less impressive year-over-year revenue increases Netflix has recorded recently and its subscriber losses. During government-imposed lockdowns, more people signed up for various streaming platforms than they otherwise would have. The recent revenue growth rate decline and subscriber losses Netflix has had to deal with are partly related to these abnormal dynamics.

Zooming out shows that Netflix’s revenue growth has been on a solid upward trajectory for a long time. The same is true of its subscriber count. Still, some of the company’s issues — especially competition and password sharing — will likely persist. To invest in Netflix, one has to believe that the company’s management will find ways to deal with these problems. Thankfully, Netflix has already settled on at least one solution: a cheaper, ad-supported subscription option.

This could deal with password sharing and subscriber losses since it would attract price-sensitive customers. Running ads could help the company generate billions in revenue . Just as importantly, it should help strengthen its ecosystem. The company collects valuable data on viewer habits that allow it to launch massive hits that rack up billions in hours viewed.

Netflix expects to add one million new subs in the third quarter. And its ad-supported tier should launch before the end of the year. All these catalysts could help Netflix’s stock recover from its recent woes and ride the wave of the next bull market, whenever it comes. 2. Pinterest

Pinterest is dealing with many of the same issues as Netflix. Revenue growth has slowed for the e-commerce specialist, especially compared to its pandemic boom. Its monthly active users (MAUs) peaked at 478 million in the first quarter of 2021. There are plenty of social media platforms to choose from — both for individuals and advertisers.

For Pinterest’s bulls, the response to these issues is that the company’s MAUs growth was on a steady trend before the pandemic, and it remains well above its pre-pandemic levels. Revenue growth may be slowing, but the company’s top line is still increasing despite the drop in year-over-year MAUs, thanks to Pinterest’s ability to squeeze more out of its customer base.

The company’s average revenue per user has been increasing. And while Pinterest does face plenty of competition in the social media space, these platforms aren’t all interchangeable. Instead, among the main ones, each offers something unique to its users, which is why they can coexist.

Meta Platforms ‘ Facebook is a great way to connect with friends and family members. Twitter is a great way to share your opinion, be it when it comes to mundane matters or more important ones, including political or social issues.

Meanwhile, Pinterest is a great way to find, save, and generate creative ideas — something the company can pull off thanks to its image discovery aspect. Pinterest typically stays away from divisive social issues, and perhaps that’s a good thing. Given how touchy various political topics have been over the past couple of years, people need at least one platform that helps them conserve their emotional bandwidth.

That’s where Pinterest comes […]

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