Everyone is looking for actions that could become the next Apple or Microsoft. After all, getting the right actions early in your corporate life can make up to 1,000 times your money or more, provided you choose wisely and stick with it for the long haul.
What are some of the business attributes that lead to these life-changing profits? A good offering of leading products or services in a massive and growing addressable market are good places to start. Add great management, preferably from a passionate and invested founder and CEO, and you may have a candidate for 100 bag returns.
To close July, here are three actions with such tempting possibilities today.
CrowdStrike Holdings (NASDAQ: CRWD) It has had a major impact since its initial public offering in June 2019, and the company’s shares have tripled above its IPO price. However, despite its high valuation and success to date, for the investor with a much longer time horizon, things could be starting for this cybersecurity disruptor.
CrowdStrike has many of the ingredients of a long-term winner. First, the cybersecurity market is large and growing, and is likely to get a major acceleration from the COVID-19 pandemic as new solutions are required to secure a remote and distributed workforce.
Grand View Research puts the global cybersecurity market at $ 156.5 billion in 2019, growing at an average annual growth rate of 10% through 2027. That is a very high growth rate for an already huge market. Even better for CrowdStrike’s cloud-based product, business spending on cloud-specific security solutions is small, but an average growth rate of 26.5% is projected to grow much faster through 2023. Compared to simple ones CrowdStrike’s $ 563 million revenue in the past 12 months, and plenty of room to run.
CrowdStrike also has what appears to be a winning business model that benefits from powerful network effects. The company’s Falcon endpoint module can be delivered via the cloud to all devices connected to a company’s network, making CrowdStrike solutions more easily deployed than hardware-based solutions that block threats on a physical node.
All endpoints served by Falcon that transmit attack data to the company’s centralized Threat Chart, which uses all of that data and artificial intelligence to refine and improve its threat detection algorithms. Therefore, the more customers CrowdStrike gets, the better their offer will be, helping you to win more customers, in a virtuous circle. Investors can see this paying off in the astonishing 85% growth in last-quarter revenue, 89% growth in subscription revenue and, most importantly, a 500 basis point increase in gross margin.
Add a highly invested CEO and co-founder, George Kurtz, who owns 8.4% of the company’s total shares, and CrowdStrike could be one of those stocks that will look like a brilliant buy in the future.
Another industry with massive growth potential is the plant-based food industry. Global “traditional” meat is a $ 1.4 billion business. However, the plant-based meat industry occupied just a small niche of $ 12.1 billion in 2019, or less than 1% market share, and is expected to grow at an annual rate of 15% between now and 2025.
However, category leader Beyond meat (NASDAQ: BYND) It is growing much faster than that and aims to greatly accelerate projected customer adoption. In the last quarter, Beyond posted a huge revenue growth of 141%. Sure, that was a big slowdown from a truly monumental growth record of 239% for the entire year of 2019, but the first quarter also saw Beyond’s food service segment stall when the pandemic erupted. Beyond’s growth also far exceeded the industry’s overall 54% growth and was six times the growth rate of its closest competitor.
Beyond Meat caused quite a stir when it produced Beyond Burger, remarkably similar to meat, which is the company’s main product from which it gets the majority of sales. However, thanks to the high relative spending on R&D, we can expect much more innovation in the present and the future. Partner KFC just launched a new product Beyond Fried Chicken in Southern California this month, adding to Beyond’s formidable list of top-tier QSR restaurant partners.
Winning great partners has helped raise awareness of the Beyond brand, as has the strategy of placing the Beyond Burger in the meat section of grocery stores, rather than the vegetarian / vegan section. Initial leadership has also brought with it a long list of famous Beyond brand sponsors, showing the network effects of initial leadership on modern, smart product and marketing strategies.
The millennial generation is clearly gravitating towards healthier and more environmentally friendly products, which should lead to growth that changes the industry in the years and decades to come. Led by a passionate founder and CEO of Ethan Brown, who owns a significant 5.3% of the company’s shares, Beyond Meat seems like a good bet to continue to lead and drive the adoption of plant-based meat worldwide.
The potential for game-changing long-term returns is also not simply limited to American companies. Chinese New Financial Technology OneConnect Financial Technology (NYSE: OCFT) It is another recently public company as of December 2019, and the stock has already appreciated 2.5 times since then. Still, this high-growth Chinese fintech looks set for even bigger things in the long run.
OneConnect is a leading cloud software platform targeted specifically at the Asian financial sector. Its various cloud software modules use artificial intelligence and leading cloud-based technology for customer acquisition, customer service, subscription, compliance and other administrative tasks. You can almost think of it salesforce.com, but specifically designed for Asian banks and insurance companies.
OneConnect was formed under the insurance giant Ping An (OTC: PNGA.Y) and reap many benefits from this association. The highly profitable Ping An not only acts as a backup customer and source of capital, but its 30 years of financial data also informed OneConnect’s algorithms, giving it an advantage over potential competitors.
While the COVID-19 pandemic hurt OneConnect’s results in the last quarter, the company still posted impressive revenue growth of 29.6%, including 50.4% from customers outside Ping An. Importantly, the gross margin grew to almost double the revenue rate, an increase of 58.1% in the quarter, which is important since the company is still posting heavy net losses. Meanwhile, the pandemic has only reinforced the need for financial companies to adopt digital solutions first, so the pandemic can actually accelerate OneConnect adoption.
OneConnect has skyrocketed this month due to a lot of good news, as the new public company was included in the FTSE Global Index Series, and also won a contract to serve Hainan, China’s largest free trade port. . However, in the long term, I think OneConnect has even bigger profits.
Much of OneConnect’s revenue is tied to customer use, so as financial companies across Asia embrace OneConnect’s digital solutions, OneConnect’s growth should continue to surprise investors for years to come.