No-Brainer Growth Stocks: Top Picks for Savvy Investors

2 No-Brainer Growth Stocks to Buy With $1,000 Right Now | The Motley Fool

These disruptive stocks could reap generous rewards for long-term investors. While bull and bear markets are a normal part of the stock market cycle, it's never fun to deal with turbulence when it hits your portfolio. The market has been enjoying a prolonged bull period that's continued into the first half of 2024, even as the recent volatility has some investors feeling nervous. All markets can present opportunities for the long-term investor. If you have cash to put to work, money that you don't need for bills or other near-term financial obligations, it's always a good time to start or add to a position in a quality company. For example, if you have $1,000 to invest in stocks right now, here are two no-brainer names to consider that could be an excellent place to park some or all of that capital for the next five years or more. Eli Lilly (LLY 2.11%) has been on a winning streak recently, with shares popping up by roughly 60% since the start of 2024 alone. The company has been a long-standing fixture in the pharmaceutical industry, but its recent successes have reignited interest from investors. These successes include its market-leading weight loss drug Zepbound and diabetes drug Mounjaro (both of which have the same active ingredient, tirzepatide, a GLP-1 inhibitor). Eli Lilly just won another regulatory victory with the long-awaited approval of Kisunla for the treatment of early symptomatic Alzheimer's disease in adults. Then, there are other established winners in the company's portfolio, such as Verzenio, Jardiance, and Taltz. In the second quarter of 2024, Eli Lilly brought in total revenue of $11.3 billion, a 36% increase from the same quarter in 2023. Mounjaro sales accounted for approximately 28% of that top-line figure, bringing in a total of $3.1 billion in the three-month period alone. Eli Lilly's Q2 net income rose by a sizzling 68% year over year to just shy of $3 billion. The market potential for tirzepatide for both weight loss and diabetes is immense. For example, while the tirzepatide formulation marketed as Mounjaro is currently approved for adults with type 2 diabetes only, it is currently being studied across other use cases, including as a mechanism to delay progression to diabetes in adults with pre-diabetes. In Eli Lilly's 176-week phase 3 study called SURMOUNT-1, which is so far the longest completed trial of tirzepatide, among adults with pre-diabetes or who were classified as obese or overweight weekly injections slashed the risk of progression to type 2 diabetes by 94% compared to the placebo. The same study also found that tirzepatide resulted in continued weight loss throughout the trial, with participants who received a 15 mg dose decreasing their body weight by 22.9% by the end of the treatment window. Eli Lilly had close to $3.4 billion in cash on hand at the end of the recent quarter, a nice stash as it continues to maintain its long-standing dividend. The company has paid a dividend in some form since the 19th century. While it currently yields less than 1%, Eli Lilly's forward annual dividend is approximately $5.29 per share. There's plenty of room for this stock to run even after the Mounjaro/Zepbound buzz starts to die down, which, by all accounts, won't be anytime soon. Some analysts think that tirzepatide could have peak annual sales potential in the ballpark of $25 billion and could be a lifetime drug for a broad swath of patients. Now looks like a great time to scoop up shares of this healthcare stock for the long run. Upstart (UPST -0.70%) is a marketplace that delivers lending decisions predicated on algorithms driven by artificial intelligence and machine learning. The platform uses over 1,600 variables, and its models are trained on more than 73 million repayment events to assess the creditworthiness of applicants. Upstart's platform leverages far more than traditional credit scoring models to determine loan approvals and is constantly calibrating to the macro environment at hand. It's also more sensitive to changing economic factors as well as a heightened level of risk present when the potential of default is on the rise. Upstart makes most of its money from sources like referral fees from serving as the middleman between applicants and the financial institutions that fund the actual loans. While the company has had to carry more loans than usual on its own balance sheet in recent quarters, third-party institutions that Upstart partners with still funds the lion's share of loans. Given the ongoing high state of interest rates, the fact that consumers are less inclined to apply for loans these days, and the reality that many institutions are more reluctant to fund loans given the increased cost of doing so, all of this has created an unfavorable lending backdrop. This reality has affected many companies, including Upstart, which, as previously stated, has a platform that is designed to constantly update to the macro situation at hand. On the bright side, Upstart's models are becoming increasingly accurate. Right now, 91% of all loans are fully automated without any human interaction. Upstart isn't profitable yet, but it generated revenue of $128 million in the second quarter of 2024. Transaction volume totaled $1.1 billion, or 143,900 loans in the three-month period, down 6% from the year-ago quarter. Upstart also reported 57% growth in its small-dollar loan program in the recent quarter. A newer product, its Home Equity Line of Credit (HELOC) program, is now available in 30 states and covers 51% of the U.S. population. Not only are 42% of HELOC applicants approved instantly, but management noted in the Q2 earnings call that it had experienced zero defaults on 300 originated HELOCs to date. There's no denying that Upstart's reliance on the personal lending environment creates a level of risk that investors must be comfortable with in order to put cash into the stock. That being said, the lending environment is slowly but surely improving, and Upstart's disruptive model hasn't gone anywhere. These elements and Upstart's improvements on multiple financial fronts could be enough to induce some investors to take a slice of the action.

2 No-Brainer Large-Cap Stocks to Buy With $500 Right Now | The Motley Fool

No stock is perfect, but quality businesses can stand the test of time in your portfolio. While a full-fledged, prolonged stock market correction could impact shares across a range of industries, investors with capital on hand can find that these periods present fortuitous opportunities to put cash to work. If you have the risk appetite to invest right now, there are plenty of tried-and-true businesses that have stood the test of time and can do so in a long-term investor's portfolio. Large-cap stocks, which generally include companies with a market value at or above $10 billion, are often household names or other established businesses that can provide more stable investment opportunities. If you have $500 to invest right now, here are two great businesses to consider for your basket of stocks. Bristol Myers Squibb (BMY 0.46%) is one of the top pharmaceutical entities in the country, with a balance sheet and diversified lineup of products to prove it. The company has dealt with the inevitable cyclicality that many big pharma companies face in recent years, which is the loss of patent exclusivity on top-selling drugs. The most recent of these events was the loss of patent exclusivity on Revlimid in 2022, which is one of the company's multiple myeloma drugs. Bristol Myers has plenty of other blockbuster drugs in its portfolio, though, with wide-ranging patent protections. Currently, top-selling drugs include the non-small-cell lung cancer drug Opdivo, a medication for numerous ailments, including moderate to severe adult rheumatoid arthritis called Orencia, anticoagulant drug Eliquis, and multiple myeloma drug Pomalyst/Imnovid. Sales of these four drugs rose 15%, 7%, 10%, and 27%, respectively, in the second quarter of 2024 compared to the same period in 2023. Looking at the second-quarter period on the whole, revenue rose 9% year over year to $12.2 billion. Taking out the impact of foreign currency fluctuations, the top line grew 11% from one year ago. The company's growth portfolio, which features precision oncology as well as immunology products, comprised nearly half of its revenue total for the quarter. The growth portfolio generated total revenue of $5.6 billion in the three-month period, an 18% surge on a year-over-year basis. Bristol Myers is profitable, and net income in the quarter came in at $1.7 billion. It finished the quarter with $7 billion in cash and investments on hand and has generated a free cash flow of approximately $16 billion over the trailing 12 months. The healthcare stock has been paying a consistent dividend for over three decades and maintains an enviable payout ratio of approximately 60% of earnings. Its current yield is in the ballpark of 5%, with a forward annual dividend rate of $2.40 per share. As icing on the cake, Bristol Myers has hiked its dividend by close to 50% in the trailing-five-year period alone. For long-term shareholders, while share price performance hasn't been a lot to write home about lately, Bristol Myers' dividend, market leadership, and underlying financial strength could make for a solid multi-year investment. HubSpot (HUBS -0.20%) is a cloud-based software-as-a-service platform that offers an array of solutions designed to help businesses operate more seamlessly. The company specifically targets small and mid-sized businesses for its client base, with cloud offerings that range from marketing and sales solutions to customer service support and content creation services. Companies can use the platform's customer relationship management (CRM) software, powered by artificial intelligence, to improve client interaction and retention in business-to-business (B2B) interactions. From lead generation to deal management to billing and invoicing customers, HubSpot's users can leverage these diverse cloud products to make data-driven decisions that optimize efficiency and the customer experience. Over the trailing 12 months, HubSpot brought in $2.4 billion in revenue, up 23% from the same period in the prior year. It's also achieved a free cash flow of $344 million with a free cash flow margin of 14% in that same window of time. Looking at the company's financial performance in the recent quarter, second-quarter revenue rose 20% year over year to $637 million. Of that total, about $624 million was attributable to subscription revenue, with the remaining $13.5 million coming from professional services (e.g., consulting services) and other revenue. Subscription revenue was up 20% year over year, while professional services and other revenue were up 18%. HubSpot isn't profitable under generally accepted accounting principles (GAAP). However, it did report adjusted earnings of $104 million in Q2. It also shrunk its GAAP net loss to $14.4 million from $112 million in the same quarter last year. HubSpot ended the quarter with about $2 billion in cash and investments on its balance sheet. Shares have been beaten down recently, with one notable factor being that a rumored acquisition by Alphabet fell through. However, HubSpot estimates that it faces a broad and growing total addressable market (TAM) opportunity. That TAM is expected to expand from $51 billion in 2023 to $77 billion by 2028, and management estimates that HubSpot has only penetrated about 10% of its market opportunity. This is a company that looks well poised to thrive on its own merits, and investors might find that its overall financial strength merits even a modest investment at its downtrodden valuation.