Bear markets offer companies the ability to refocus and retrench. Companies that look toward the future when times are tough can rapidly expand into new growth areas ahead of the next economic swing higher.
That can leave them positioned to take advantage of new opportunities that don’t sound appealing when markets are dropping. The housing crash in 2008 led many investors to avoid potential growth stories in the new technology of electric cars or to overlook the development of smartphones and apps.
Today, a considerable amount of money is flowing into the cryptocurrency space, by retail and professional investors alike. It’s a space that tends to have a 50 percent pullback ever year, and patient investors are learning about the rewards for sitting through such drops.
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One company moving ahead in the space is Block (SQ). Renamed from Square, the firm is moving beyond a payments platform and into a full-service provider for everything cryptocurrencies. Analysts like what they have to hear so far.
Action to take: Shares are down nearly 60 percent in the past year, but revenues are up over 30 percent. And new business lines in the crypto space could be huge for the platform, which could make today’s earnings numbers irrelevant. Long-term investors may want to consider shares up to $90.00.
For traders, the stock is a strong rebound contender in the coming weeks as markets move off of oversold levels. The September $120 calls last going for about $4.90, are expensive as the market is pricing in a rebound in the coming months. But the option could still deliver mid double-digit returns.
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.