The presence of millennials in the investing world is growing, but with new, fresh, outlooks on life, their investing tastes have evolved.
Nov. 14, 2020
Investing today is easier and simpler than ever before. Whilst it might seem like something that older generations do, there is a growing number of millennials learning how to grow their portfolio. For millennial investors, the tech world is key, but with so many brilliant stocks to choose from the three chosen below each have their merits.
1. Snap Inc
Amidst the pre and post-election market chaos, there have been several companies that have quietly posted some incredible earnings reports. Snap Inc (NYSE: SNAP) was one such company. The popular social media app posted revenue of $678 million for the quarter, an increase of 52% year-over-year (YoY), as well as 249 million daily active users (DAUs), up 18% YoY.
Investors would be forgiven for remaining bearish on this stock as it has shown vulnerability over the past few years, much of which included increasing competition from Facebook, resulting in lackluster growth up until Q4 2018.
Despite the risks involved by investing in a stock that has only recently found its feet, it has shown strength by remaining a popular, well-used app throughout. In addition, Snapchat has moved onto new strategies to keep its growth alive, namely games, chat features, and even mini-episodes of original content.
Snapchat also caters more to younger generations. CEO Evan Spiegel stated in the company’s most recent conference call that in countries such as the U.K., France, and the U.S., Snapchat has connected with around 75% of millennials and 90% of Gen Zs. By reaching these generations in such high numbers, it is a stock that will stick around for a while.
Etsy (NASDAQ: ETSY) is an anomaly in the e-commerce world, specializing in vintage items and home-made arts and crafts products. Whilst Amazon may have the upper hand in this sector, this has not prevented the platform’s double-digit growth since its IPO in 2015. This quirky company has more relaxed promotional rules and lower sellers fees than Amazon, but I suppose it must also help that Etsy chooses to help business owners rather than actively compete with those who use its platform.
This stock taps into the younger generational attitude of ‘buying local’ and ‘buying authentic’. Younger generations are much more conscious of the effects of mass production and are, as a whole, more socially and environmentally aware. That is not to say that Amazon is not also a favorite stock for this generation, but rather that Etsy is likely to stay in the public consciousness as an alternative way to shop online whilst supporting local businesses.
One thing that investors should take into consideration about Etsy is its volatility. Before the events of 2020 gave e-commerce a boost, Etsy was growing, but experiencing periods of volatility with shares losing around 38% of their value between March and December of 2019. This year, however, the stock has rallied more than 220% and the company is well and truly on the radar of many of us who have been forced to stay at home browse the new mask fashion trends.
For more information on how Etsy makes a profit, you can read more in our article ‘How Does Etsy Make Money During The COVID Pandemic?‘. But for the future, Etsy’s resiliency against Amazon, as well as its niche market status, it should continue to grow as a great stock to invest in.
Tesla (NASDAQ: TSLA) is a big hit among millennials, likely due to its environmentally-conscious business model and eccentric CEO in Elon Musk. In a recent Apex report for Q3, Tesla had overtaken Apple as the number 1 stock for young investors. This is a trend amongst this generation for greener alternatives as NIO, China’s answer to Tesla, has seen a 150% rise in investments from younger investors.
Tesla is on a hot streak right now, posting five consecutive quarters of profitability. In particular, Q3 saw revenue of $8.77 billion, up 30% YoY, while deliveries hit a record of 139,593, up 43% YoY.
Tesla has several initiatives to help build a greener future, of which its solar panel business is key. It also recently announced a plan to reduce the overall prices of electric vehicles, thus making them more accessible for the wider population. Whilst this looks great for Tesla, investors should be aware of increasing competition from other car manufacturers.
If Tesla can continue to stay ahead of the curve in what is becoming a green revolution, then it will definitely be a top stock to watch over the next few years.
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.