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3 Growth Stocks You Can Buy Right Now With Less Than $100

Motley Fool - Mon Oct 9, 2023

Growth stocks can supercharge your portfolio during times of market strength. So, today, as we head toward a new bull market -- whether it's right around the corner or farther down the road -- it's a good idea to snap up a few of these players. Especially if their long-term prospects are bright and they're trading for a bargain today.

The S&P 500 has climbed this year, but the rally has left out some terrific growth stocks that have what it takes to thrive over time. In fact, you can buy these three top players with less than $100 right now. I'm talking about two exciting e-commerce companies and a telehealth leader. Let's take a close look at these three dynamic growth stocks.

1. Chewy

Chewy(NYSE: CHWY) is a favorite of U.S. pet owners, selling everything from treats to medicine. And it soon may become a favorite of Canadian pet parents too, as the company is about to launch its first international expansion. Chewy predicts market share and profitability similar to what it's achieved in the U.S., so this move could be significant.

Though Chewy's stock has declined, earnings have been something to cheer about. The company reported its first annual profit last year. And, even in a difficult economy, its active buyers continue to spend more. In the most recent quarter, their spending increased more than 14%.

Another sign of Chewy's strong membership base is reflected in its Autoship service, a system that automatically reorders your favorite products and delivers them to your door. Autoship accounts for about 75% of Chewy's total sales. This customer loyalty offers us reason to be confident in Chewy's ability to keep revenue climbing.

Meanwhile, the stock trades for less than $20 a share, so you can easily pick up a few shares with your $100 budget -- or buy Chewy and one of the other two companies mentioned below.

2. Teladoc Health

Teladoc Health(NYSE: TDOC) fell out of favor as revenue growth slowed later in the pandemic -- and as the company announced billion-dollar non-cash goodwill impairment charges last year. Investors worried about the telehealth giant's ability to one day make it to profitability.

But Teladoc heard those concerns and took action. The company has cut costs to balance its quest for growth with the goal of profitability, and the plan is starting to show results. In the most recent quarter, for example, Teladoc reported adjusted EBITDA of more than $72 million, beating expectations.

The company is seeing growth in both its integrated care business -- plans sold to companies and organizations -- as well as its BetterHelp mental health service, offered directly to consumers. And within integrated care, chronic care is booming, with members often signing up for more than one program. This is a key growth area because about half of Americans suffer from at least one chronic illness.

Today, Teladoc trades at its lowest ever in relation to sales, and shares go for about $18 apiece, so you don't have to make an enormous bet to get in on this high-potential player.

3. Etsy

Etsy(NASDAQ: ETSY), like many other e-commerce companies and retailers, has felt the pressure of higher inflation. As it weighs on consumers' wallets, they're less likely to buy discretionary items.

The company, a platform where artisans sell their goods to shoppers, still has managed to keep the revenue growth it gained earlier in the pandemic though. For a couple of good reasons. First, customers really like the variety of quality goods they find on Etsy, and many come back. Since 2019, Etsy Marketplace active buyers have increased in every second quarter except the one last year, which saw a small dip.

Quarter and YearEtsy Active Buyers (in Millions)
Second quarter 201942.7
Second quarter 202059.5
Second quarter 202189.6
Second quarter 202288.1
Second quarter 202390.6

Data source: Etsy.

Second, Etsy is a capital-light business. It doesn't have to invest a fortune in capital equipment, warehouses, or transport. And that means it can transform most of its adjusted EBITDA into free cash flow -- 90% in the second quarter on a trailing 12-month basis.

Etsy Marketplace gross merchandise sales (GMS) has declined in recent quarters, but this may not be the case for long. Etsy said GMS grew in May, in June, and into the beginning of the third quarter.

At the same time, Etsy trades for only 13 times forward earnings estimates, which is dirt cheap for a growth stock (and Etsy's lowest in at least three years). So, a share of Etsy for about $62 looks like a must buy right now.

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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chewy, Etsy, and Teladoc Health. The Motley Fool has a disclosure policy.

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