Companies can’t control what the stock market is doing. That’s why great companies will sell off in a bear market along with poor ones. It also means that companies facing strong growth may continue to do so, even if the market doesn’t recognize the value in the short haul.
Patient investors can use bear markets to buy into growth opportunities. It’s also a great time to weed out companies that looked like growth opportunities but haven’t been.
One such growth opportunity right now is Roblox (RBLX). While other companies are spending billions to build out their own version of the Metaverse, Roblox already has an existing platform that’s faring just fine.
The company just reported that bookings were about 11-15 percent higher compared to last September, and a 5-7 percent increase from just two months ago. As one of the company’s key growth rates, the news looks good for the company during a period of poor share performance.
Action to take: The company is growing and has considerable revenue, making it a leader in the Metaverse space. Shares are likely to move past their 54 percent decline over the past year in time, and the stock is worth accumulating here.
For traders, there may be some immediate short-term downside with markets in the coming weeks. But that could be a good opportunity to buy the March $50 calls, last going for about $7.00, at a cheaper price before share trend upwards again.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.