While there are many ways to generate wealth, few avenues can offer the financial independence that can be achieved by putting your money in the stock market. Since 1980, the broad base S&P 500 it has toured four significant bear markets, although it has achieved an average annual total return, including dividends paid, of 11% per annum.
Perhaps the best thing about investing in stocks is that you don’t need any amount of cash to get started. If you have $ 500 ready, which won’t be needed to cover bills or emergencies, that’s more than enough to get you working on the next five actions, which seem like an obvious purchase.
If it’s your purpose to grow bargain hunting, you’ll love biotech stocks Exelixis (NASDAQ: EXEL). Although Exelixis has recently been weighed down by less than stellar overall survival data for the lead drug Cabometyx in a phase 3 study for previously untreated liver cancer patients, Cabometyx has shown that it can provide a sustainable double-digit sales growth for the company.
Cabometyx is currently approved to treat first- and second-line renal cell carcinoma (CRC), as well as advanced hepatocellular carcinoma (liver cancer). These indications alone should allow Exelixis ’main drug to generate $ 1 billion or more in recurring sales by 2022.
But the company does not stop at these indications. Cabometyx is being examined in approximately six dozen additional clinical trials as monotherapy or combination treatment. One such study, CheckMate-9ER, which examined Cabometyx in combination with Bristol Myers SquibbOpdivo cancer immunotherapy has already been approved as a first-line treatment for RCC. If only a handful of these six dozen trials bear fruit, Cabometyx could become a multimillion-dollar drug.
Nor should you overlook the Exelixis war chest. Management expects the company to have between $ 1.6 billion and $ 1.7 billion in cash, cash equivalents and restricted investments and cash equivalents at the end of the year. They are more than enough money to cover their internal research and development, as well as make acquisitions.
If you have a long-term investment horizon, there probably isn’t a bad time to invest in a payment processing company. Visa (NYSE: V).
The beauty of the Visa operating model is that the company is cyclical. This means that an expanding economy tends to encourage consumers and businesses to spend more, which helps Visa generate higher business commissions on transactions. Because periods of economic expansion last substantially longer than contractions or recessions, long-term investors are playing a numbers game that carries significant weight in their favor.
Visa has a very long track record to expand its presence. With most global transactions made in cash, Visa has the opportunity to organically enter emerging markets, as well as make acquisitions (e.g. Visa Europe in 2016), to reach new merchants.
You’ll also want to keep in mind that Visa strictly adheres to payment processing. You might think that the company’s lack of loans (i.e., the issuance of credit cards) results in valuable interest income and commission income. However, with the recessions and economic contractions that are inevitable, it also means that Visa is not exposed to credit defaults when they appear. Not having to book cash to cover bad credit loans is one of the keys to Visa to get a 50% more profit margin.
The Original BARK Company
It may not be the fastest growing industry in the US, but the pet industry has proven virtually unstoppable. That’s why a $ 500 investment The Original BARK Company (NYSE: BARK), which you might know better as BarkBox, can go a long way.
Between 1988 and 2019-2020, American Pet Products Association surveys found that pet ownership increased from 56% of all households to 67%. Today, that translates into nearly 85 million homes with pets, including more than 63 million in dogs, which is the specific pet that BARK serves.
Although BARK has its products at approximately 23,000 retail outlets in the United States, it is primarily an online company with a monthly subscription-based foundation. This lack of overhead is one of the main reasons why it has consistently produced a gross margin of around 60%. When you get the 91% increase in subscriber count to 1.2 million from the previous year, you can see why it’s easy to get excited about this company.
However, what will really generate long-term profits for BarkBox is the company’s innovation. It introduced a number of new services in 2020, including Bark Home, which sells basic accessories such as collars, leashes and beds, as well as Bark Eats, a personalized service that works with dog owners to develop a dry food diet. for your puppy. BARK has several long-term writings wrapped.
Traditionally, insurance stocks are boring and slow-growing companies. However, don’t tell people about the online insurance market platform EverQuote (NASDAQ: ALWAYS).
According to EverQuote, the entire insurance market will spend $ 154 billion on distribution and advertising spending, a figure that will grow by approximately 4% annually through 2024. Of that total spending, $ 6.5 billion will focus on digital advertising, which is the domain of EverQuote. This spending on digital advertising is expected to grow at a rate four times higher than 16% per annum (16% per annum) of total insurance market spending by 2024.
As an intermediary, EverQuote works to make life easier for insurers and consumers. With almost every major car insurer on board, consumers can set prices and quickly compare policies. As for insurers, they will get more damage because the EverQuote platform attracts motivated buyers. Approximately 1 in 5 consumers using the EverQuote marketplace will purchase a policy.
In addition, EverQuote is becoming new vertical insurers. In addition to car policies, it also has a market for rental, home, life and health insurance. While car policies continue to make up the bulk of EverQuote’s sales, growth in these new verticals has easily outpaced the growth in car channel sales.
Social media giant Facebook (NASDAQ: FB) it won’t earn any points from investors for originality, but it’s a proven money winner with clear competitive advantages that makes it a simple purchase.
If you want to know how dominant Facebook is, take a quick look at first-quarter operating results. It ended the quarter with 3,455 million monthly active users (MAUs) visiting one of its proprietary sites on a monthly basis (2,855 million MAUs for Facebook and 600 million MAUs unique for Instagram and / or WhatsApp). There is no single platform on this planet that offers advertisers access to 44% of the world’s population. Not in vain, Facebook’s advertising revenue continued to grow at a double-digit percentage, even during the worst moment of the coronavirus pandemic.
What’s really amazing about Facebook is that the more than $ 101 billion in advertising revenue it achieves for 2021, based on first-quarter operating results, is derived almost entirely from its eponymous site and Instagram. While WhatsApp and Facebook Messenger are two of the most popular social apps that exist, neither has been significantly monetized so far. When monetized, Facebook can expect further sales growth, cash flows, and growth.
If that wasn’t enough to convince you, consider that Facebook is doing some work to become a leading virtual reality / augmented reality company with its Oculus devices. The company did not specifically break down sales of its Oculus devices in its quarterly reports, but the “Other” category where Oculus sales were recorded saw sales increase by 146% in the first quarter.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We are motley! Questioning an investment thesis (even one’s own) helps us reflect critically on investment and make decisions that help us be smarter, happier, and richer.