Nasdaq Bear Market: 3 Proven Winners You'll Regret Not Buying On the Dip

$Meta Platforms, Inc.(FB)$ $Starbucks(SBUX)$$Western Digital(WDC)$

Resource: Motley

By Sean Williams

• Although it's been a rough start to the year, corrections and bear markets are the perfect time to put your money to work
• These innovative companies have a long track record of delivering for their shareholders

These highly profitable and time-tested companies are screaming buys following a peak decline of 22% in the Nasdaq.

Regardless of whether you've been putting your money to work in the stock market for decades or are a relatively new entrant to investing on Wall Street, it's been a challenging start to the year. Both the broad-basedS&P 500and nearly 126-year-oldDow Jones Industrial Averageofficially hit correction territory in March -- they lost at least 10% of their value since hitting respective all-time highs in early January.

It's been an even tougher go for the growth-focusedNasdaq Composit, which lost as much as 22% of its value since hitting an all-time high five months ago. This peak decline briefly pushed the Nasdaq into abear market.

While there's no doubt bear market drops can be scary, history also shows they're the ideal time to put your money to work. After all, every notable decline in the major indexes throughout history has eventually been erased by a bull market rally. It's simply a matter of buying proven winners and allowing your investment thesis to play out over time.

With the Nasdaq bear market putting a number of great companies on sale, now looks like the perfect time to strike. Here are three proven winners you'll regret not buying on the dip.

Meta Platforms

The first proven winner just begging to bebought by long-term investorsduring this "tech wreck" is social media leaderMeta Platforms. Meta is the company formerly known as Facebook.

Skeptics of Meta have been concerned with the company's exorbitant investments in themetaverse, which could take quite some time to pay off. The metaverse is the next iteration of the internet that'll allow connected users the ability to interact with other people and their surroundings in 3D virtual worlds. An underwhelming growth forecast for 2022, coupled with lower profitability due to beefed-up metaverse spending, has nearly halved Meta's share price.

But we're not talking about your run-of-the-mill social media company attempting to stake its claim here. This is Meta, the company that controls four of the most popular social media destinations on the planet: Facebook, Instagram, WhatsApp, and Facebook Messenger. In the fourth quarter, Meta had3.59 billion peoplevisiting at least one of its owned assets each month. That's more than half the world's adult population.

Even with mounting concerns about a possible recession as the Federal Reserve hikes interest rates to stamp out historically high inflation, Meta's ad-driven operating model shows few signs of weakening. Last year, the company reported a 24% increase in ad-pricing power. Merchants fully understand that they're not going to find broader access to eyeballs through any other platform, which is what affords Meta such incredible pricing power.

Something else to consider is that Meta Platformshas the capital and operating cash flowto invest aggressively in the metaverse, even if the payout is years away. Meta ended 2021 with over $33 billion in net cash, and generated close to $58 billion in operating cash flow last year. There's plenty of wiggle room with this balance sheet to invest in what could become a multi-trillion-dollar opportunity.

Over the past five years, Meta has averaged a price-to-earnings ratio of 29. You can scoop up shares right now for less than 14 times Wall Street's forecast earnings for 2023.

Western Digital

A second proven winner that you'll regret not buying on the dip during this Nasdaq bear market swoon is storage solutions companyWestern Digital.

Western Digital's biggest enemy is often itself and its peers. When storage pricing significantly improves, the industry has a bad habit of oversupplying the market and driving prices back down. The cyclical nature of the storage industry, coupled with Western Digital shooting itself in the foot from time to time, is what typically keeps a low valuation ceiling on this industry. Butthings are different this time around.

With the COVID-19 pandemic wreaking havoc on global supply chains, it's effectively been impossible for Western Digital and its peers to flood the market with supply. As a result, the company's pricing power should remain strong throughout 2022 and into 2023.

What's particularly intriguing about the company is that it hasmultiple avenues to generate higher revenue. For instance, a resurgence in PC sales during the pandemic sparked demand for internal and external hard drives. The company should also benefit from an extended period of next-generation gaming console sales. New consoles require beefed-up storage options.

Beyond just a pandemic-related boost, Western Digital isperfectly positioned to benefit from data center expansion. As more businesses shift their operations online and move their data into the cloud, demand for storage is going to increase significantly. This should be a boon to hard-disk drive sales, and pave a path for the company's NAND flash-memory solutions to become a data center staple by the decade's midpoint.

Even with a low valuation ceiling for the industry, Western Digital looks like a screaming buy at less than six times Wall Street's fiscal 2023 earnings forecast. To boot, analysts expect double-digit sales growth in fiscal 2022 and 2023.

Starbucks

A third and final proven winner that you'll regret not buying on this Nasdaq bear market dip is well-knowncoffee giantStarbucks. Shares have tumbled 37% since hitting an all-time intra-day high nine months ago.

Skeptics have three big issues with Starbucks. First, they're concerned about the unionization efforts in various stores across the U.S., which could ultimately increase labor costs for the company. Second, there are rapidly rising input costs beyond just wages. Over the past year, coffee prices are up 70%. The third issue is the COVID-19 pandemic, which continues to adversely affect the company's overseas locations.

While these are all tangible concerns, none of them should have any bearing on Starbucks' long-term growth strategy or its innovation. For example, Starbucks hasn't had any issues raising prices to keep up with or stay ahead of the inflationary curve. The company's customer base is exceptionally loyal, and modest price increases have historically not scared them away.

Speaking of its loyal customer base, Starbucks ended Jan. 2, 2022,with 26.4 million Rewards members, up 21% from the prior-year period.  While Rewards members enjoy perks, such as an occasional free drink or food item, Starbucksreaps the rewards of improved operating efficiencyand higher tickets. Rewards members are more likely to store their payment information on their phones, thereby speeding up in-store and drive-thru payment. They're likelier to take advantage of mobile ordering, too.

In addition to relying on loyal customer growth, Starbucks is innovating in a variety of ways to cater to a changing environment. AsI've previously discussed, one way it's aimed to boost sales and its operating efficiency is by focusing on its drive-thru operations. All new ordering boards suggest high-margin drink and food pairings and allow drivers and passengers to interact with baristas via video chat.

Starbucks still has a long runway to expand its reach in international markets, and has demonstrated on numerous occasions that it can innovate on the food and beverage front to increase ticket size. With shares valued at their lowest forward-year price-to-earnings multiple since 2012, it's the opportune time to strike.