Market volatility and near-term uncertainty can be challenging to deal with these days -- or at any time. However, even in the current environment, there are excellent investment opportunities. Those who go shopping for great stocks right now and hold on to them for a while should see excellent returns over long periods of, say, a decade or more, despite the near-term headwinds.
Let's consider four outstanding companies that are worth investing in and holding on to for a long time: Eli Lilly(NYSE: LLY), Vertex Pharmaceuticals(NASDAQ: VRTX), Meta Platforms(NASDAQ: META), and Netflix(NASDAQ: NFLX).
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1. Eli Lilly
Eli Lilly is a leading pharmaceutical company that has garnered a lot of headlines in recent years. The company's work in diabetes and weight management is the main reason why; its famous brands like Mounjaro and Zepbound are growing their sales at an almost dizzying pace.
Lilly is still flexing its innovative muscles. It recently reported positive phase 3 results for an oral GLP-1 therapy, orforglipron, that would be yet another breakthrough.
But besides work in its core areas, Lilly is also making strides elsewhere. Newer approvals like Ebglyss for eczema look promising. The company's work in oncology is showing good progress. Older medicines, such as cancer medicine Verzenio and immunosuppressant Taltz, continue to help drive top-line growth.
And amid the strong financial results it consistently delivers, Lilly keeps increasing its dividend: It has more than doubled its payouts in the past five years.
Eli Lilly is an excellent stock for growth- and income-oriented investors. The company's shares took a post-earnings dip due to weak guidance, but for investors willing to hold on to its shares for a while, that offers a buying opportunity.
2. Vertex Pharmaceuticals
Vertex Pharmaceuticals has what might be the most powerful moat in the world -- it holds a monopoly in the market for drugs that treat a rare lung disease called cystic fibrosis (CF). This dominance grants the biotech significant pricing power. Although many other drugmakers have tried to enter this field and challenge Vertex, none has been successful yet.
Vertex continues to make progress. In December, it earned approval for Alyftrek, a next-gen CF therapy with a convenient once-daily dosing -- its current standard of care, Trikafta, needs to be taken twice a day. There's a good chance another company will eventually make a breakthrough in CF; if it happens, Vertex will be ready, having significantly diversified its lineup in recent years. In January, Journavx, a medicine for acute pain, got the nod from regulators.
It also markets Casgevy, a gene-editing therapy for two rare blood diseases, which received approval in late 2023. These will help drive strong top-line growth.
Lastly, Vertex's pipeline looks exciting. The company's strategy is to develop therapies where there are unmet needs, and it has several programs along those lines across all stages of clinical trials. Vertex should see plenty of clinical and regulatory progress over the next five years, while maintaining solid financial results.
The stock did take a post-earnings dip because of disappointing results, but it still looks likely to deliver superior returns to patient investors.
3. Meta Platforms
Meta Platforms recently delivered excellent first-quarter financial results. Though we should never make long-term investment decisions based on a single (albeit solid) quarter, Meta's results continued a series of robust performances, showing once again why it's such an attractive stock. The company has an ecosystem of 3.43 billion daily active users across its websites and apps, making it one of advertisers' favorite targets.
Artificial intelligence (AI) initiatives are helping drive user growth and engagement, leading to stronger ad-related revenue. And the company is doubling down. Management announced significant AI investments, and given the results they've helped achieve, Meta seems justified in going that route. AI and advertising will be considerable long-term growth avenues for the company, especially considering that Meta Platforms won't lose its lead in the social media sphere thanks to its network effect.
Lastly, Meta Platforms will continue to ramp up other opportunities, including its metaverse projects and business messaging on WhatsApp. The stock might not maintain its momentum this year, depending on the state of the economy, but its long-term prospects remain bright.
4. Netflix
Netflix is the leader in streaming and has remained so despite mounting competition. Streaming platforms are popping up like weeds; some are free, some specialize in specific areas (like sports or old movies), some rely on ads, and so on. Through it all, the company has maintained its lead thanks to the strength of its brand name. "Netflix" is often used as a synonym for streaming, and none of its competitors has this kind of edge.
The company's large ecosystem allows it to collect data on viewer habits, and create shows and movies accordingly. It has had plenty of smashing successes and should have more. In recent years, Netflix has made important changes to its business, including introducing an ad-supported tier and cracking down on password-sharing. These changes have led to significant improvements in profitability and free cash flow.
And the streaming specialist still sees a considerable growth runway ahead. It estimates a $650 billion revenue opportunity, of which it has just scratched the surface. Netflix has been crushing the market for the past two years, but there is plenty of upside left for investors willing to hold on to its shares for five years or longer.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Prosper Junior Bakiny has positions in Eli Lilly, Meta Platforms, and Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Meta Platforms, Netflix, and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
