Their share prices might be lower because of the COVID-19 outbreak, but their long-term prospects still look great.
It’s not too late to buy great stocks at attractive prices. Despite the stock market’s bounce last week, there are still plenty of stocks with tremendous growth prospects that are priced at a discount.
But which stocks have the greatest chances of delivering stellar returns? I think that $5,000 invested in each of the three following stocks should make you a fortune over the next 10 years.
There’s more data being generated than ever before. And that means there’s a greater need to analyze data than ever before. The problem is that most of the tools available for data analysis fall short of meeting users’ expectations. They’re too cumbersome and too complicated. Alteryx (NYSE:AYX) provides the answer to these problems.
Alteryx’s data analytics platform doesn’t require any programming (although it’s compatible with the leading data analysis programming languages). The company’s focus on usability is paying off. Its platform won the 2019 Gartner Peer Insights Customer Choice award for data science and machine learning platforms. Over 6,000 customers now use Alteryx’s platform, including 719 of the 2,000 biggest companies in the world.
But Alteryx still has a tremendous growth opportunity ahead of it. Market researcher IDC projects that the big data and analytics software market will total $49 billion globally in 2021. Alteryx should capture an increasing share of that market as more customers standardize their data analysis using its platform.
Its shares might look ridiculously expensive with a forward earnings multiple of 123. But keep in mind that Alteryx’s valuation is based on expectations of tremendous growth over the next few years. I think that it will deliver on those expectations. And with its shares still way off their highs from earlier this year, there’s no better time to buy Alteryx than now.
You might not have realized that there’s a war going on around you — the “war on cash.” This war encompasses a major trend of consumers switching from using physical currency to electronic forms of payment. Square (NYSE:SQ) ranks as a top general in this war on cash.
Square is best known for its small card readers used by many small and medium-sized businesses. This payment processing service is the foundation of an entire ecosystem that the company offers, with other products and services including customer loyalty, marketing, payroll, and e-commerce applications. Square also provides loans and debit cards to businesses.
In addition to its focus on businesses, Square is a major player in the peer-to-peer payments arena with its Cash App. PayPal’s Venmo has been the leader in this market, but Cash App is catching up quickly. It’s generating strong revenue growth for Square and also presents a larger customer base to which the company can market new products and services.
Sure, Square stock has been shellacked by the COVID-19 pandemic as its customers reel from the impact of quarantines and non-essential business shutdowns in many areas. But I think this presents an awesome buying opportunity. The economy will bounce back and so will Square.
3. The Trade Desk
There’s also another big trend under way that could have escaped your attention. The days of personal negotiations to place advertising spots are numbered as advertising agencies turn to programmatic advertising, which uses software applications to buy ads quickly and cost-effectively. The Trade Desk (NASDAQ:TTD) is the clear leader in buy-side programmatic advertising.
The most significant catalyst for The Trade Desk is the rise of connected TV (CTV). CTV includes all of the streaming services that have gained widespread popularity. Not all of them use ad-based models, but quite a few of them do. The Trade Desk CEO Jeff Green recently said that “we are in the middle of a once-in-a-lifetime consumer shift to connected devices and streaming content.” And that consumer shift presents a huge opportunity for his company.
Programmatic advertising still only represents a small part of the total ad market. But with programmatic ad spending growing five times as fast as overall ad spending, it won’t take too long before it makes up a big share of the market. The Trade Desk stands to benefit from this growth.
Shares of The Trade Desk plunged as much as 49% during the coronavirus-fueled market sell-off before rebounding somewhat. It’s likely that some advertisers could cut their marketing budgets to save costs during this challenging period. But the long-term prospects for The Trade Desk remain very bright. My view is that buying this stock now at a discount should set up investors for terrific returns over the next decade.
Author: Keith Speights