3 growth stocks fell 25% to 71% for buying in August

Annie, the main character in the popular Broadway musical that bears her name, had some great advice for investors: The sun will rise tomorrow. From an investment perspective, she was certainly right in principle if not in the details. The stock market will be much brighter in the not too distant future.

Seasoned investors will realize that such optimism can help them make money. The key is to put that sunny outlook into action by collecting stocks of well-managed companies whose shares are trading at a discount. With that in mind, there are three growth stocks that fell 25% to 71% to buy in August.

1. Amazon

Looks like the sun has already gone out a bit Amazon (AMZN 2.65%). Just six weeks ago, the internet giant’s shares were down 45% from their peak set in November 2021. But there is a rebound now, with Amazon stock now approaching 25%.

Amazon’s 20-for-1 stock split in early June was not a catalyst. However, investors appeared to have been impressed by several of the company’s moves since then, including the company’s announcement on July 21 that it plans to acquire a primary care provider. 1 Live Healthcarebetter known as One Medical.

Even better, Amazon easily beat revenue expectations with its second-quarter results. Amazon Web Services (AWS) cloud hosting and its advertising business have led the way. Amazon is expecting a strong third quarter as well.

Amazon’s near-term prospects look better than many expected. Most importantly, the company’s long-term prospects remain strong with the potential for e-commerce growth and expansion into new markets such as healthcare.

2. Intuitive surgery

intuitive surgical (ISRG 0.37%) It stands out as another turbulent growth stock trying to come back. Shares of the robotic surgical systems company are now down nearly 29% from a 52-week high after plummeting as much as 41%.

Unlike Amazon, Intuitive Surgical delivered disappointing results for the second quarter. The company’s profit fell year-on-year and missed consensus expectations. Intuitive also reported a 15% year-over-year decline in system placements.

However, the easily overlooked good news for Intuitive was that the volume of actions continued to grow, up 14% over the same period last year. The more procedures that are performed using their robotic surgical systems, the more recurring revenue Intuitive will generate. More than 80% of the company’s total revenue is recurring revenue.

Intuitive’s long-term future looks bright. The aging population must drive growth in surgical procedures. A company’s innovation should expand the types of actions its technology can be used for. August is a great time to buy this turbulent stock at a discount.

3. PayPal Collectibles

There is still no recovery in sight PayPal Collectibles (PYPL 2.82%). The fintech stock is down 71% in the past 12 months.

Many culprits are blamed for PayPal’s poor performance. The company continues to deal with a loss ebaya job. E-commerce growth has slowed in the wake of the COVID-fueled boom in 2020 and 2021. appleThe introduction of “Tap to Pay on iPhone” contactless payment technology has alarmed investors. There are concerns about the potential impact of the recession. Of course, the sell-off of growth stocks that began last year has hit PayPal stocks hard as well.

Overall, though, the PayPal business is doing well. The company continues to generate strong revenue and overall payment volume growth. PayPal’s balance sheet remains strong.

The shift from cash to digital payments will not stop. PayPal remains the biggest player in this shift. With stocks trading at the lowest valuation ever based on price-to-sales multiples, PayPal seems like a good choice for August if you’re a long-term investor.

John Mackie, CEO of Whole Foods Market, an Amazon company, is a member of The Motley Fool’s Board of Directors. Keith Speights holds positions at Amazon, Apple, Intuitive Surgical and PayPal Holdings. Motley Fool has positions at Amazon, Apple, Intuitive Surgical and PayPal Holdings and recommends. Motley Fool recommends eBay and recommends the following options: March 2023 long calls $120 on Apple, July 2022 short calls $57.50 on eBay, and March 2023 short calls $130 on Apple. Motley Fool has a disclosure policy.

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