If you are looking for the definition of “rollercoaster” in the dictionary, do not be shocked if it depicts a snapshot of the stock market in 2020. In a span of six months, Wall Street has packed in the fastest bear market nosedive in history, as well as the fastest rally back to new heights from a bear market bottom of all time.
There is no question that volatility can be daunting at times, but it also represents a unique opportunity for long-term investors to buy in large stocks at a perceived discount, as 2020 has shown.
Best of all, the Federal Reserve’s persistently dull monetary policy has made loans cheaper than they have ever been. This has virtually pulled the red carpet for growth stocks and has likely secured their outward performance for years to come.
If you, say, have $ 5,000 to invest that is not necessary for emergencies or to cover bills, I can suggest investing that money to work in one or more of these off-the-charts growth stocks.
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Green Thumb Industries
For years, marijuana stocks were virtually unstoppable, but that has not been the case for much of the industry over the past 17 months. Growing pain has become a reality for North American pots, with high tax rates in the US and supply chain problems in Canada hampering the works. But there is no doubt that legal cannabis will be a massive growth driver this decade, which is why investors need to think hard to buy in. Green Thumb Industries (OTC: GTBI.F).
Green Thumb is a vertically integrated multistate operator that currently has 48 operational dispensaries, but has licenses to double its store count to 96 in a dozen states. Many of the states that are Green Thumb are concentrating on having billion annual sales potential by the middle of the decade. These include Illinois, which became the first state to fully legalize the consumption and sale of recreational weeds through the legislative process, and tourist destination Nevada, which is projected to lead the nation in cannabis spending per capita .
Perhaps my favorite growth metric regarding Green Thumb is that a majority of its sales are derived from higher-margin derivatives. Although dried cannabis flower is often associated with legal weed sales, flower is an easily commoditized product with low margin. The weapons, edibles and influential beverages that Green Thumb sells are something that will be responsible for boosting its margins and profits for years to come.
Wall Street is currently counting on Green Thumb to grow its sales from $ 216 million in 2019 to an estimated $ 1.66 billion in 2024.
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Trupanion
Another off-the-charts growth stock to buy is Trupanion (NASDAQ: TRUP).
In general, insurance stocks are boring, growing companies that rely on premium pricing to grow. That will not be the case with Trupanion, which is an insurer for health benefits for companion animals, such as cats and dogs.
Why mentors? According to data from the American Pet Products Association, it has been at least a quarter of a century since U.S. spending on pets decreased on an annual basis. This is because pets are increasingly seen as members of the family, and are cared for as such. This year alone, an estimated $ 30.2 billion will be spent in the U.S. on veterinary care and product sales, as well as $ 10.7 billion on other services, which include grooming, boarding, and insurance.
The ah-ha moment for Trupanion is that only between 1% and 2% of companion animals in North America are currently insured. This means that there is a fairly long job to encourage pet owners to purchase coverage for their “family members.” And while competition is bound to pick up in the companion animal insurance space, Trupanion has the advantage of having already forged relationships in the clinic with thousands of hospitals.
After delivering roughly $ 384 million in 2019 sales, Wall Street is looking to Trupanion to claw its way to $ 1 billion in annual sales by 2024.
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CrowdStrike Holdings
Growth seekers should also consider taking their $ 5,000 and putting it to work in cloud-native software-as-a-service CrowdStrike (NASDAQ: CRWD).
On the surface, the driver for big revenue for CrowdStrike is the constant demand for cybersecurity protection. No matter how good or bad the US economy does, or how big or small a business is, hackers, robots and malware do not take vacation days. This creates a transparent demand for cybersecurity solutions that simply do not disappear, and which have only been exacerbated by the work-from-home trend precipitated by the coronavirus pandemic.
CrowdStrike’s Falcon platform was designed in-house, using cloud-scale artificial intelligence, to help its solutions identify malware and other potential threats to end users. It sounds expensive, but it is actually an effective way to eliminate the high costs that are typically associated with local cybersecurity solutions. Perhaps it is no surprise that this effective model for identifying threats has led to three consecutive years of triple-digit subscription growth on an annual basis per year.
Furthermore, CrowdStrike generated 91% of its revenue in its fiscal first quarter from subscriptions, and has witnessed the number of customers purchasing four or more subscriptions for cloud modules grow from 36% two years ago to greater than 55% in the April-end quarter . In short, gross margin for subscription is robust (78% on a adjusted basis in Q1 2021), and more of CrowdStrike’s customers are adding new products.
After reporting $ 481 million in full-year sales for fiscal 2020, Wall Street forecasts $ 1.34 billion in fiscal 2023 revenue.
Image Source: Square.
Square
Fourth and last, investors can invest their $ 5,000 to work in a game changer for financial technology such as Square (NYSE: SQ).
Square’s best known is for its vendor ecosystem and, to a lesser extent, its lending program. For the better part of the past decade, Square has provided small buyers with point-of-sale devices to process transactions. The dollar amount that crosses its networks jumped between a little over $ 6 billion to $ 106 billion between 2012 and 2019.
But the standout figure of the seller’s ecosystem in recent years is that we’re getting a larger number of larger buyers on board. As a fee-driven platform, larger buyers will offer substantially higher annual gross payment volumes, and thus much juicier fee-based potential. Coupled with its lending program, Square’s more mature operating segments should provide steady growth.
Then there’s the peer-to-peer payment platform Cash App, which has all the fees to become Square’s primary growth driver within the next year or two. Since the end of 2017, the monthly active user of Cash App has more than doubled to more than 30 million, and the acceptance of Cash Card is rapidly increasing. Cash Card is a traditional debit card that runs from a user’s Cash App balance.
With Square able to record revenue from trading costs, rapid bank transfers, and bitcoin exchanges, full-year revenue is expected to rise from $ 2.3 billion in 2019 to $ 12.1 billion in 2022.
