Wall Street has consistently proven throughout history to be patient. For example, each and every one of the 38 double-digit percentages corrects the index S&P 500 Navigating its way since the early 1950s, it was eventually wiped out by the bull market rally. In fact, a return from the Corona Bear market is the strongest return Wall Street has witnessed.
But even with the S&P 500 close at all times, bargains can still be found. The key, however, is that investors need to be patient and willing to allow their investment theses to operate over time.
If you have $ 200,000 to invest and do not need that capital to pay bills or cover emergencies by at least 2030, the next five stocks have the real potential to make you a millionaire.
Acquisition and holding of disruptive companies are often a good way to build wealth over time. One such company that could double its value by 2030 and turn investors into millionaires is a travel and hospitality platform Airbnb (NASDAQ: ABNB).
Airbnb is best known for providing a platform that connects travelers with more than 4 million hosts worldwide. This represents only part of what the total host will likely be in 2030. In the three years leading up to the epidemic, Airbnb market bookings more than quintupled to over 250 million. This is because Airbnb bookings are often cheaper and more convenient than staying in similar hotels.
Equally exciting, the company’s fastest-growing category is long-term stays, defined as 28 days or more. Not only does the growth in long-term stay prove that Airbnb’s operational model is not fashion, but it communicates perfectly with an increasingly mobile / remote workforce.
However, Airbnb is not happy just disrupting the hotel industry. It is also looking for more than the travel dollars of consumers with its experience sector. By working with local experts, Airbnb has the potential to set up adventures and travel arrangements beyond stay-only bookings. It’s a real distraction in every sense of the word.
Advertising goes digital, and PubMatic (NASDAQ: PUBM) Strives to be one of the biggest beneficiaries of this change.
PubMatic is a programmatic side-by-side advertising platform that uses computational learning algorithms to buy, sell, and optimize ads. In simpler English, the company’s customers are advertisers who want to sell their display space. PubMatic’s platform allows these publishers to set certain parameters in its cloud-based platform, such as the lowest price they will get for the sale of display space. Beyond these inputs, PubMatic takes care of tailoring awareness to its customers to keep all parties satisfied.
Clearly the company is doing something right. Dollar-based net preservation was 157% in the third quarter, compared to 150% in the second consecutive quarter. What these figures tell us is that publishers who were with PubMatic in the second quarter and third quarter of 2020 spent 50% and 57% more respectively in the second quarter and third quarter of the current year.
What’s more, PubMatic’s organic growth rate completely blows the 10% annual growth forecast for the digital advertising industry by the middle of the decade.
Another game changer with the potential to turn an investment of $ 200,000 into a million dollars by the end of the decade is the social media company Pinterest (NYSE: PINS).
Over the past six months, much has been made of Pinterest’s subsequent decline in the number of monthly active users (MAU) from 478 million to 444 million. However, this decline seems to be more in line with the rates of vaccines that are ticking and people are leaving home more often than anything really wrong with Pinterest’s operating model. A longer-term look at MAU growth shows that the company is in line with its historical norms.
What’s really impressive is how efficient Pinterest has been in generating revenue from its users. Even with global MAUs rising by less than 1% in the quarter ended September compared to the same period last year, global average revenue per user (ARPU) and international ARPU jumped 37% and 81%, respectively. This shows that merchants are willing to pay a lot of money to bring their products to the eyes of Pinterest-motivated buyers.
This leads to the other key point: Pinterest is perfectly placed to become a major e-commerce center over time. No other social media platform lists what customers like or want better from Pinterest, making it easier for merchants to target their advertising expenses.
The American cannabis industry should provide a lot of green to patient investors in this decade. One such company with the potential to double fivefold by 2030 is a Multi-State Operator (MSO) Columbia Care (OTC: CCHWF).
Shares of Columbia Care marijuana is an animal in the cannabis field (it holds nearly 100 retail licenses) that relies on two growth targets. First, the company is not afraid to make acquisitions to expand its reach. It recently acquired Medicine Man from Colorado, and in June completed the acquisition of Green Leaf Medical. While the downside of a heavy-organic expansion strategy is higher costs in the short term, it should set the company excellent growth prospects and return to profitability in 2022.
Columbia Care’s second cog focuses on markets with limited licenses. By that, I mean countries where regulators intentionally restrict how many licenses are distributed in total, as well as a single business. Operating in licensed states like Illinois, Pennsylvania and Virginia ensures Columbia Care can build its brands without being rolled out by MSO with deeper pockets or a more established brand.
Last, but certainly not least, the king of e-commerce Amazon (NASDAQ: AMZN) It has all the tools it needs to turn a $ 200,000 investment into a million dollars by 2030.
Most people probably know Amazon because of its dominant online market. The August report by eMarketer estimates that the company will account for 41.4% of all online sales in the US this year. Being the desired source for online purchases has helped Amazon enroll over 200 million people in Prime companies.
But Amazon’s real growth opportunity has nothing to do with retail. Instead, the leading cloud infrastructure sector Amazon Web Services (AWS) will be its long-term cash cow. AWS is responsible for nearly a third of global cloud infrastructure spending, and the margins at AWS revolve around the margins that Amazon collects from its market.
Since 2010, Wall Street and investors have felt comfortable valuing Amazon at a median of 30 times its operating cash flow. By 2024, the company is expected to reach $ 314 in cash flow per share, according to Wall Street consensus estimates. It is not unlikely that Amazon will reach $ 500 in cash flow per share by 2030, which will stabilize its shares at $ 15,000.
This article represents the opinion of the author, who may not be in agreement with the “official” recommendation of Motley Fool’s premium consulting service. We are colorful! Investigating an investment thesis – even one of our own – helps us all think critically about investments and make decisions that help us be smarter, happier and richer.