April is quickly approaching, and investors are on the lookout for the best stocks to buy to kick off a new month. I’m one such investor, constantly looking for the best options to ride out various scenarios. With financial contagion fears spreading, bets are increasing that the Federal Reserve may be looking to pivot shortly. Indeed, saving the financial system and reining in inflation are two entirely different objectives that may require a difference in policies. We’ll have to see if the market is right in this regard. That said, if the market is right, and rates are set to decline, there’s a wide swath of companies that may outperform in such a scenario.
Here are three stocks to buy, for those in the rate-cut camp right now.
| SHOP | Shopify | $44.31 |
| COIN | Coinbase | $63.04 |
| NFLX | Netflix | $323.52 |
Shopify (SHOP)
First on this list of stocks to buy is none other than e-commerce company Shopify (NYSE:SHOP).
Like other pandemic darlings, Shopify has seen its stock price fall off a cliff in 2022. The company’s performance this year has been better, but still tumultuous. Despite a rather impressive rally to start the year, shares of this e-commerce platform provider plunged following the release of its Q4 2022 results on Feb. 15. Indeed, this earnings release stoked investors fears on a few fronts.
First, it appears Shopify’s growth slowdown may be longer-lived than previously thought. Despite better year-over-year comps, the company still wasn’t able to surpass analysts expectations in terms of its forward guidance. Second, high inflation has restricted consumer spending across its platform, leading to worse-than-expected projections for the company for 2023.
It’s important to note that Shopify’s guidance considers the currently high inflation filtering through the economy. This high inflation could lead consumers to make more budget-friendly and essential purchases, as mentioned by CFO Jeff Hoffmeister during the earnings conference call in Feb.
That said, if inflation comes down because the Fed officially broke something, maybe it’s going to be party on for Shopify from here. We’ll have to wait and see, but this is an intriguing contrarian bet in the high-growth space.
Coinbase (COIN)
Coinbase (NASDAQ:COIN) is among the companies I’d put in the stocks to buy bucket, only for the most aggressive investors. Founded in 2012, Coinbase is the leading cryptocurrency exchange in the United States. The company offers a range of consumer services in these sector. These span its core crypto exchange business, an NFT open market, and a software product storage framework.
Coinbase is primarily recognized for its crypto exchange (the world’s second-largest trading volume after Binance). However, Coinbase is also relatively well-known for providing some of the best access to cryptocurrencies (more than 170) relative to its centralized counterparts.
While this has provided some trouble for Coinbase in its recent struggles with the Securities and Exchange Commission (SEC), variety has been Coinbase’s friend. We’ll have to see how its case with the SEC pans out. But for those bullish on the future of crypto, Coinbase remains a leading stock to consider. The company’s upside comes from two potential sources. First, and most importantly, trading volumes could rise if another bull market rally takes hold. Coinbase earns the lion’s share of its revenue and earnings from trading volume, so this is the most important aspect to consider.
Secondly, Coinbase could see its share of staking and other ancillary services pick up. If they do, the company could become a lot closer to being profitable – something many investors clearly want to see.
Netflix (NFLX)
Last on this list of high-risk stocks to buy is none other than streaming giant Netflix (NASDAQ:NFLX).
Like the other names on this list, Netflix had an amazing start to the year. However, its performance since mid-February has been less-than-stellar. The stock dropped more than 20% this year peak-to-trough, a sign of just how volatile stocks such as NFLX can be.
That said, NFLX stock has seen some impressive price performance over the past week. On Thursday, Netflix share prices increased significantly, soaring to 9.8% throughout trading, giving up some of its gains by close. The driving force behind this boost in the value of the streaming giant was the recent revelation that despite a slow start, its ad-supported subscription tier is gaining traction among users.
Nonetheless, despite being in the initial stages of establishing its advertising business, Netflix’s revenue will increase with every new subscriber, improving its financial performance. Besides, after experiencing losses for years, the streaming giant became cash flow positive in 2022, generating $2 billion in operating cash and $1.6 billion in free cash flow. The top business expects its financial results to improve this year, with a lower limit of $3 billion in cash on hand predicted. Since Netflix has surpassed the critical point, it will evolve into a significant cash-producing entity.
That’s what bulls are hoping for at least. Personally, I put Netflix generally in the too-risky-to-buy category. That said, I can see why investors would want to view Netflix among the growth stocks to buy, especially due to its leverage to the growth trade.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.