Resilient Stocks: Navigating the Market's Ups and Downs

The stock market has been on a rollercoaster ride this year, with a handful of tech giants dominating the performance of the S&P 500. However, a closer look reveals that many other stocks have been struggling, including pharmaceutical giant Pfizer and social media platform Snap. Despite their recent setbacks, these companies may still hold promise for long-term investors willing to weather the storm.

Uncovering Hidden Gems in a Volatile Market

Pfizer: Weathering the Storm

Pfizer, the pharmaceutical powerhouse, has faced its fair share of challenges in recent times. The company's revenue and earnings took a hit as its COVID-19 medicine and vaccine sales declined. Additionally, a promising pipeline candidate, a combination coronavirus/flu vaccine, reported mixed results in a pivotal clinical trial. These setbacks have weighed heavily on Pfizer's performance.However, the company has also experienced several positive developments. In the second quarter, Pfizer reported its first year-over-year revenue growth in some time, with its top line increasing by 2% compared to the previous year. This modest but meaningful improvement is not solely attributable to its recent acquisition of cancer specialist Seagen.Pfizer's pipeline has also seen a flurry of new approvals, with seven in 2023 alone – more than twice as many as its peers. Many of these new products are still in the early stages of contributing to Pfizer's top line, and the company's reliance on its COVID-19 products is expected to diminish over time. Furthermore, Pfizer is actively pursuing breakthroughs in weight loss treatments, with the advancement of the once-daily danuglipron to pivotal clinical trials.The company's oncology pipeline, bolstered by the Seagen acquisition, also holds significant promise. Pfizer's vast resources could help accelerate the development of new blockbuster treatments, building on Seagen's extensive pipeline. As Pfizer works to rejuvenate its lineup, the process is already underway, and the company's long-term prospects remain promising.Investors seeking a steady income stream may find Pfizer an attractive option. The stock's forward yield tops 5.88%, significantly higher than the S&P 500's average of 1.33%. Pfizer has also increased its payouts by 62% over the past decade, and while it may take time for the company to fully recover, it has the potential to deliver solid returns for long-term investors, especially those who opt for automatic dividend reinvestment.

Snap: Navigating the Challenges

Snap, the social media platform, has faced its own set of challenges, with its stock price plummeting by around 50% so far this year. However, a closer examination reveals that the company has made significant strides in various areas.During the second quarter, Snap's revenue increased by 16% year-over-year, reaching $1.2 billion. While this growth rate is not as impressive as it was a few years ago, it represents a partial rebound over the past year. The company's user base continues to expand, with 432 million daily active users, a 9% year-over-year increase, and a potential milestone of 1 billion monthly active users within the next couple of years.Snap's vast user ecosystem has made it an attractive platform for businesses seeking to run targeted advertising campaigns. The company has also been working to diversify its revenue streams, with initiatives such as the Snapchat+ subscription plan and investments in generative AI and augmented reality. As these initiatives gain traction, Snap could potentially become profitable and deliver better returns in the future.It's important to note that Snap is not without its risks. The company remains unprofitable on a GAAP basis, with a net loss per share of $0.15 in the second quarter, although this was an improvement from the $0.24 loss per share reported in the year-ago period. However, the company's user growth and diversification efforts suggest that it may be on the path to a turnaround.At less than $10 per share, Snap may be worth considering for investors willing to take on a bit more risk in pursuit of potential long-term rewards. The company's ability to capitalize on its user base and successfully execute its diversification strategy will be crucial in determining its future performance.