The Nasdaq Composite (^IXIC -0.18%) is officially in a correction, with the tech-heavy Nasdaq-100 index down about 12% from its recent high. And while there are some stocks that still look rather pricey, even after the downturn, there are some excellent bargains to be found for patient long-term investors.
With that in mind, here are two “forever stocks” I own in my portfolio, both of which look attractive after dropping by 15% or more from their 2025 peaks.
A second chance to get “Back to Starbucks”
Starbucks (SBUX -1.53%) stock soared in mid-2024 when Brian Niccol was hired as CEO, and it rallied again after an excellent earnings report in January. But with the stock down by about 15% from its recent high, now could be a second chance to get in.
In his short tenure as CEO, Niccol has been hard at work attempting to reinvigorate growth in the company, and to re-create the neighborhood coffee shop feeling that may have gotten lost along the way in Starbucks’ current scale. Menu simplifications and a customers-only policy for tables and restrooms are just a couple of examples.
At first glance, Starbucks’ latest results might not look too great, such as a 6% year-over-year decline in customer traffic, but zooming in on Niccol’s time as CEO, the numbers are very encouraging. The year-over-year decline in same-store transactions improved by 200 basis points compared with the prior quarter, for example, and North America revenue grew 5.7%.
It’s also worth noting that much of the company’s initiatives aren’t reflected in the numbers yet, such as the more recent menu simplifications, as well as some of Niccol’s cost-cutting initiatives. Turnarounds don’t happen overnight, and Starbucks’ is still in the relatively early stages. So, now could be a great time for patient investors to take a closer look.
An incredible growth story, still in the early chapters
MercadoLibre (MELI 2.34%) soared to a fresh all-time high after it reported its fourth-quarter earnings just a few weeks ago, but has since given back its post-earnings rally and more in the recent correction. But it’s important to not let the recent market noise overshadow this tremendous growth story.
In the fourth quarter of 2024, MercadoLibre’s marketplace sold 27% more items year over year, including double-digit growth in every major geographical market where the company operates. Mercado Pago’s payment volume soared by 33%, and the company’s credit portfolio increased in size by 74% compared to a year ago.
Perhaps most notably, MercadoLibre calmed the profitability concerns that weighed on the stock after its third-quarter earnings report. The company’s operating and net margins rebounded slightly, and losses from the credit portfolio stabilized after looking alarmingly high in the prior quarter.
There could still be several years of rapid growth ahead. E-commerce and cashless payment adoption are still in the relatively early stages in some of MercadoLibre’s key markets, the company’s logistics platform continues to improve, and new initiatives such as the MELI+ subscription service and new credit card products create opportunities to deepen relationships with customers. With the stock down about 16% in less than three weeks, now could be the time to add shares to your portfolio at a discount.
Volatility could persist
As mentioned, I own both of these stocks in my own portfolio, and I intend to hold both for the long run. I have absolutely no idea what they’ll do over the next few months or years, and if the trade war intensifies, the U.S. economy falls into recession, or bad economic data continues, it’s entirely possible the volatility could remain for a while.
However, both of these are solid, well-run businesses with lots of potential and attractive valuations, and now could be an excellent entry point for patient long-term investors.
Matt Frankel has positions in MercadoLibre and Starbucks. The Motley Fool has positions in and recommends MercadoLibre and Starbucks. The Motley Fool has a disclosure policy.
