This year has been a firm reminder that no matter how long you’ve been investing, you haven’t seen it all.
The 2019 coronavirus disease pandemic (COVID-19) has accumulated volatility of approximately 10 years over a period of four months and has led investors on an incredible ride. We have witnessed the landmark S&P 500 lose more than a third of its value in less than five weeks, as well as heavy technology Nasdaq compound he recites record after record in the past few weeks.
However, periods of increased panic and volatility have historically proven to be a good thing for long-term oriented investors. That’s because it allows people to buy great deals at a discount.
And if the stock market has taught us anything, it’s that you don’t need a large amount of cash to grab your financial future. If you can save $ 300 right now that won’t be needed to pay bills or cover emergencies, you have more than enough to buy these three smart stocks.
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Okta
Although the short-term increase in Okta (NASDAQ: OKTA) It can be aptly described as meteoric, and there is always the possibility of short-term disruption, one trend to absolutely hit the table in this decade is cybersecurity. Okta may seem expensive now, but you will probably kick yourself in five to 10 years for not buying it at this “bargain price.”
One reason why cybersecurity is such an active industry is because companies were already moving towards remote work environments and shared clouds long before COVID-19 arrived. The pandemic has simply accelerated the demand for cloud development, and thus for cloud protection services. Also, don’t forget that cybersecurity is not an optional solution. No matter how well or poorly the economy is working, businesses large and small need solutions to protect their information from illegal activity. This gives cybersecurity companies a certain expectation of constant cash flow.
What makes Okta an intriguing option are the company’s identity verification solutions. Many of Okta’s platforms rely on machine learning to evolve and identify situations where additional precautions, such as two-factor authentication, may be necessary before granting access to a shared cloud.
Also, Okta doesn’t offer a one-size-fits-all product. Rather, their solutions are scalable to a company’s needs. This means that there is a high probability that Okta will generate better margins over time as customers grow and add additional Okta security solutions.
In my opinion, Okta has the potential to average 30% annual sales growth for much of this decade.
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Freshpet
Another smart action to buy that may seem expensive now but has all the tools necessary to support a high valuation is the natural manufacturer of pet food and treats. Freshpet (NASDAQ: FRPT).
Just as cybersecurity is an unstoppable trend, so is our nation’s love for companion animals. Since 1988, the number of American households that own a pet has increased from 56% to 67%, according to a survey by the American Pet Products Association. It is also noteworthy that at no time, at least in the last quarter century, have sales decreased year-over-year for pet expenses. Pet owners will pay whatever it takes to ensure the health of their family members fees, and that’s where Freshpet comes in.
Just as we have witnessed that organic and natural foods generate a healthy portion of total grocery spending, Freshpet’s focus on natural and organic ingredients for pets should produce similar results. A higher quality product comes with a higher expected price, and typically juicier margins. With Freshpet increasing its presence beyond 22,000 stores, as of June 12, 2020, double-digit growth is almost certain to continue for the foreseeable future.
Also, don’t forget that Freshpet is still in the early stages of marketing your brand and reaching your core audience. As their market penetration improves among premium cat and dog food manufacturers, margins should increase and big gains should follow soon.
Image source: Getty Images.
Kirkland Lake Gold
Who Says Precious Metal Mining Stocks Cannot Generate Excellent Growth? Certainly not the owners of Kirkland Lake Gold (NYSE: KL), which have seen management acquire world-class assets and deliver some of the most impressive results in the entire mining industry.
A component of Kirkland Lake’s history is that its underlying metal core, gold, is currently at a peak of more than eight years. In addition to the uncertainty linked to COVID-19, gold is benefiting from historically low interest rates around the world, and central banks that inject money into their respective financial systems deliver their fist. Such action should weaken the US dollar, which is good considering that gold and the dollar generally move against each other, and send people to gold as the preferred safe-haven asset.
Beyond the higher prices of precious metals, Kirkland Lake Gold has the best balance of gold stocks. The first quarter ended with $ 530.9 million in cash and cash equivalents, as well as no debt. It also recently doubled its quarterly payment to $ 0.125 and repurchased 9.7 million shares for a total of $ 329.8 million. All this management team has done in recent years is to enhance shareholder value.
On an operational basis, Kirkland’s three producing assets delivered a comprehensive maintenance cost (AISC) of $ 776 per gold equivalent ounce (GEO) during the first quarter, and this was due to higher costs associated with the acquisition of Detour Gold . Even with this AISC perceived as high, Kirkland is currently tracking an operating cash margin of over $ 1,000 per GEO. Translation: You can expect a solid reinvestment, a healthy dividend, and perhaps additional acquisitions in the future.
