Take a break from worrying about the close election and consider adding these three companies to your portfolio for long-term growth.
Nov. 6, 2020
These three equities are sure to win over your heart and mind this month as the election rages on. One is an unstoppable force that has benefitted from the pandemic, another is a new kid on the block with some powerhouse investors, and the third has had a great deal of hedge fund interest lately.
What is there to say about Jeff Bezos’ Amazon (NASDAQ: AMZN) that hasn’t been said already? Yes, it holds a 50% market share of all e-commerce sales in the U.S. and yes, it is the number one cloud provider in the world with Amazon Web Services (AWS), a division that saw its biggest revenue ever earlier in the year. Indeed, the pandemic gave it a serious boost as people were forced to work and play at home, pushing its Prime membership to 126 million in the U.S. Aside from corporations relying on AWS for their work-at-home infrastructure, the service also boasts big-name clients like Netflix, Facebook, and Twitter. Amazon’s revenue has climbed over 720% in the last decade and is expected to exceed $355 billion by 2022. Additionally, its stock price is up over 75% year-to-date (YTD) at $3322 as of November 5 and is forecasted to grow to over $5600 in two years.
So, what’s next for this titan of industry? Drones. Not only for delivery but home security as well; also, for the home, the company is working on releasing AI-powered robots to assist with chores, which will no doubt incorporate Amazon’s AI assistant, Alexa. Also, it plans on expanding the number of Amazon Go stores in the U.S. from the current 27, which is a timely endeavor as the stores are nearly entirely automated and offer contactless payment transactions. Most importantly, however, is the company’s investment in India, a country it pledged to give $1 billion to digitize small- and medium-sized businesses and put them online. Moreover, Amazon will export $10 billion worth of Indian goods by 2025 and offer financial products to the nation like a credit card, car insurance, and gold investment products.
StoneCo (NASDAQ: STNE) launched its IPO in November 2019 and garnered investors’ attention due to a big-stake purchase of 4.4% by none other than Berkshire Hathaway, a company whose leader decries investing in IPOs. The company is responsible for payment processing in Brazil, a country where nearly half of all payments are in cash. It leases out point-of-sale (POS) devices that accept credit cards and cash and charges a fee for each transaction made with the machines and by online vendors. StoneCo’s stock is up nearly 43% YTD and its total purchase volume (TPV) is up 114% year-over-year (YoY).
Numbers aside, the thing that makes this company such a tantalizing investment is its early-entry advantage in the e-commerce payments realm, a young sector in Brazil and Latin America. E-commerce represents only 5% of all sales in the country and this number is sure to grow in the future, especially motivated by pandemic-related trends, which already boosted the sector by nearly 57% in the first five months of this year. Additionally, StoneCo has a lot of space in which to expand with the entirety of Latin America in its backyard, a continent where even more people are without bank accounts and use only cash-a gap filled by the company.
3. Exact Sciences
Exact Sciences (NASDAQ: EXAS) is a molecular diagnostics company that is famous for Cologuard, the first stool DNA test for detecting colorectal cancer. With the boomer generation reaching old age, there are over 100 million Americans who are at average risk for colorectal cancer, representing an $18.4 billion market, of which the company is expecting a 40% market share within the decade. Exact Sciences posted revenue of $876 million last year, up nearly 100% from the year before and its stock price is up over 30% at $126.68, as of November 5.
The company has been added to 43 hedge fund portfolios, the highest number yet, and has had growing volume on the Robinhood platform but the reason I like it is because of its one-of-a-kind product. Cologuard is the only non-invasive early-detection test on the market and sales in it are expected to rise during the pandemic as it can be performed at home without the need for a face-to-face doctor visit. These trends will likely continue as people will opt to avoid the embarrassingly uncomfortable procedure and perform it themselves instead.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.