October marks the start of the end of the year, and for a notoriously volatile month these three stocks should stay strong and stable during Q4.
Sept. 30, 2020
October is supposed to give us a sigh of relief after the usual September lows, but often we find it can be quite a volatile month with rarely sub-1% swings in either direction for the S&P 500. However, that has been the norm since March, so there’s no knowing really what’s going to happen. Despite these grave foretellings though, October has marked the end of more bear markets than it has seen begin — investors should take note and keep an eye on those stocks not yet in their portfolios.
This month, the focus is on continued strength in growth. With that in mind, these three stocks each bring a history of good revenue, strong growth, and excellent potential for the future, and were also doing so before the pandemic hit.
Microsoft (NASDAQ: MSFT) had a bit of a volatile month in September, with its failed TikTok bid as a particularly low point, and its announcement of its $7.5 billion Bethesda deal as a high point. In addition, the new Xbox pre-order date has come and gone, with much of the same problems Sony faced with its own pre-orders, namely, selling out too fast and uncertainty of delivery date for the consoles.
But Microsoft is a well-rounded stock, it pays out a dividend, and its revenue keeps on growing, even during a pandemic. In its most recent earnings call Microsoft posted $38 million in revenue for the quarter, a 13% increase year-over-year (YoY). For its fiscal year which ended in June, revenue was up 14% to $143 million whilst its earnings per share (EPS) also increased 14% from $5.06 to $5.76 YoY.
With everything that happened in September, a pull-back in stock price could potentially occur. If this happens, then investors should think of this as a buying opportunity for a successful business that encompasses gaming, workplace communications, cloud networks, and more recently 5G.
Paypal (NASDAQ: PYPL) has been a consistent member of these types of articles. Included in my ‘Top Stocks to invest in for June‘ and ‘September‘, it makes an appearance again because of its pure strength as a growth stock. Paypal was already a top choice before the pandemic hit, but now as digital payments and e-commerce sectors are booming, Paypal’s stock has soared over 70% this year as a result, as of September 29.
The majority of Paypal’s revenue comes from e-commerce and it remains the industry leader for digital payments. Paypal’s active users total 346 million, with over 60 million belonging to its popular subsidiary Venmo. In fact, Paypal added 21.3 million new organic accounts in Q2, which is the highest ever — a 136% increase YoY.
Paypal is well positioned to continue benefiting and expanding as the digital payments sector continues to grow. Coming into the pre-Christmas buying season, more and more payments will be made online as consumers opt for e-commerce rather than push past swathes of sniffling sickly people in brick-and-mortar stores.
Having recently been sent a document over DocuSign (NASDAQ: DOCU) myself, it seems fitting that I should include it in my top stocks for October. The concept is so simple and clear, whilst I felt that the process was also secure enough for sensitive information. With remote working set to continue en masse for a while, the need for a safe, secure, and digital way to send confidential documents and contracts to colleagues is now more essential than ever.
DocuSign in its most recent earnings continued its trend of increasing its revenue year on year, with this report posting a 45% increase YoY to $343.3 million for the quarter. Out of that, $323.6 million came from subscription services alone and $18.6 million in other revenue, including professional services. For a company that only went public 2 years ago, this is impressive growth.
CEO Daniel Springer believes that the addressable market in the future could be worth up to $45 billion. With continued growth plus a need to make business deals as well as employment contracts digital, DocuSign is a well-positioned, simple solution for the emerging digital world we are working in.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.