A titan, a market leader in its industry, and a new entrant in a hot sector are three stocks we will be buying on future dips for long-term growth
Oct. 13, 2020
Triggers like the COVID-19 outbreak, news of a vaccine, or uncertainty about another stimulus have driven volatility in the stock market this year, offering many opportunities for savvy investors to snatch up quality equities at a discount. We present you with three companies we’re keeping our eyes on to grab at lower prices when available.
1. Disney
The biggest media company in the world, Disney (NYSE: DIS), has irons in many fires including theme parks, cruises, real estate, a Hollywood studio, and ownership of huge franchises like Lucasfilm and Marvel. Most recently, the company launched Disney+, an over-the-top (OTT) streaming service that has had extraordinary success and helped Disney offset some losses caused by park shut-downs. Disney’s brand is synonymous with family-friendly entertainment and its customer base is extremely loyal, willing to shell out ever-increasing funds to visit its theme parks, which have grown 1,100% to $159 per ticket . This brand loyalty extends to Disney+, pushing subscriber growth from 10 million to over 60 million between its premiere in November 2019 to August of this year, and is projected to reach nearly 160 million by 2024.
The company’s recent decision to offer ‘Mulan’ on Disney+ drove nearly 900,000 new installations of the app. The film costs $30 on top of the $7 for the subscription and, according to researchers, made $270 million thus far; and it’s important to remember that Disney keeps all of that money and doesn’t need to share with distributors and theaters. Should Disney decide to adopt this release model, it will certainly benefit as it still has a few guaranteed blockbusters in its coffers like ‘Soul,’ ‘Black Widow,’ and ‘West Side Story.’ Once the pandemic is over and attendance at Disney’s parks resumes in earnest, the company will see a huge spike in revenue as this segment has represented at least half of Disney’s revenue in the past.
2. Tesla
Elon Musk’s electric vehicle (EV) company, Tesla (NASDAQ: TSLA), is the market leader of its industry, holding an impressive 80% of the U.S. EV market share, even with the elimination of the federal tax credit for buyers of its vehicles. Sales in the U.S. have increased over 1,100% in the last five years to reach nearly 229,000 this year so far. Also impressive is the company’s record sales in China, the number one EV market in the world, delivering over 10,000 vehicles in March, its best results in a single month ever.
Tesla has seen phenomenal growth with its revenue increasing by nearly 21,000% to $24.6 billion from 2010 to 2019, and expected to reach $100 billion by 2025. These numbers would have been more impressive had the pandemic not shuttered two of Tesla’s factories earlier this year. On the COVID-19 front, the company is offering contactless delivery and test drives, arranged and unlocked via Tesla’s app. The company’s sales, revenue, and stock price continue to grow, which is up nearly 400% since the start of the year.
3. Snowflake
Snowflake (NYSE: SNOW) went public in September and had investor Berkshire Hathaway gobble up shares. Even though it went against most investment principles the head of Berkshire, Warren Buffett had, it was a wise investment as Snowflake’s stock price more than doubled on the same day. The company specializes in data-warehousing in the ultra-hot cloud sector and it’s a cloud-agnostic, fast, frictionless, secure solution that boasts a 158% net retention rate; that means that it not only retains customers but that they also spend more money on the service annually. Speaking of customers, Snowflake doubled them to over 3,100 in the last year and more than doubled customers that provide $1 million or more in revenue for the company.
In May 2019, Snowflake appointed Frank Slootman of ServiceNow fame as its CEO, the man responsible for boosting that company’s revenue by nearly 2,000% during his tenure. Under Slootman, who came out of retirement to join, the company’s revenue went up 132% over the year that ended July 31 and its margins are up nearly 25% year-over-year (YoY) to 61.6% for the six months that ended July 31. Additionally, Snowflake has zero debt, over half a billion dollars in cash and investments, and operating cash was down nearly 60% in the same period. With the cloud data platform projected to be worth $84 billion by 2024, Snowflake, with its impressive numbers and potential is sure to profit.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.