These three businesses are worth buying and holding forever despite recently higher share prices.

Adding to stocks that have seen a recent jump in share price can be difficult psychologically. It was just 20% lower one month ago — you missed it.

Then the stock continues to rise, and a profitable business goes uninvested because a great “buy the dip” opportunity didn’t come along.

With this said — and with the S&P 500 Index up 10% in the last month — many stocks have investors asking, “Did I miss my chance?”

Probably not — especially over the long term.

Today three Motley Fool contributors will look at three stocks that explore this idea — Disney ( DIS 0.40%), Figs ( FIGS 0.17%), and Airbnb ( ABNB 0.25%) — and explain why they are outstanding long-term holdings despite recent increases. Disney’s momentum and proven pricing power

Bradley Guichard (Disney): Disney has just accomplished something that seemed unheard of only a couple of years back: It’s overtaken Netflix in total subscribers . Disney reported 221 million subscribers across its three platforms, Disney+, ESPN+, and Hulu, just edging Netflix’s 220.7 million. Even better, Disney has momentum after adding 14.4 million Disney+ subscribers last quarter. This doesn’t make Disney the streaming leader yet, but it shows how far the company has come.

The stock has gone on a tear as a result, and has gained 30% over the past 30 days as investors’ ears prick up.

Many were ready to abandon the stock because of recession fears, inflation worries, and plummeting consumer sentiment. But the mouse is hard to keep down for long. Revenue grew 26% year over year in the third quarter, while diluted earnings per share rose to $0.77 from $0.50.

When inflation rises, companies with pricing power will come out on top. Disney has proven for decades that people will pay for its unique products even as prices at the parks rise. A trip to a Disney theme park is a rite of passage for many families, and people are flocking back now that COVID-19 has waned. This is why revenue for Disney Parks is up 92% so far this fiscal year, going from $11.1 billion to $21.3 billion.

The Disney Parks segment is also very profitable, boasting a 30% operating margin. This will help the company as it fights the streaming wars. Direct-to-consumer streaming isn’t profitable as companies battle it out to gain subscribers. Having another tremendously profitable segment gives Disney a leg up on the competition. Even better, these products are very symbiotic — one promotes the other. Disney+ will likely boost demand for the parks and vice versa.

Although the stock has been up significantly over the last 30 days, it is still down 31% over the past year, so it deserves strong consideration from long-term investors. A beloved brand with expansion plans

Josh Kohn-Lindquist (Figs): After spiking above $45 per share shortly after its initial public offering in 2021, shares of direct-to-consumer (DTC) healthcare apparel company Figs saw its shares plummet to single digits in less than a year.

Facing decelerating sales growth and a couple of quarters of underwhelming earnings, Figs saw its premium valuation quickly reeled in by the market. FIGS PS Ratio data by YCharts. However, now trading with a price-to-sales (P/S) of only five, Figs is worthy of a second look, despite its roughly 30% rise in share price this last month. One way to put this P/S of five into context is to imagine that if Figs can grow into a profit margin of 10%, it would effectively trade at 50 times earnings.

Considering that two of the company’s apparel peers — Nike and Lululemon — own 13% and 15% profit margins, this 10% margin for Figs isn’t too unreasonable, especially as it matures over time.

While Nike and Lululemon are exponentially larger brands than Figs and much more well established, the young upstart could soon deserve to be mentioned alongside these behemoths, as it already owns a profit margin of 7%.

Furthermore, its net promoter score (NPS) of +80 highlights that it is one of the most beloved apparel brands out there. NPS is scored on a -100 to +100 scale and shows how likely a customer is to recommend a product to others, with a positive score considered good — making Figs’ mark of +80 incredible.

Thanks to its DTC sales, streamlined digital experience, and premium healthcare apparel offerings, Figs completely flipped a forgotten-about and commoditized industry on its head — creating incredible customer loyalty along the way.

While sales growth slowed to “only” […]

source 3 Growth Stocks Up Between 27% and 30% In the Last Month: Should You Buy Now?

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