1. Square

Fintech leader Square has come forward as a force to contend with in the financial industry. The company gives point-of-sale solutions, analytics, capital and other services to merchants. The company also services customers through its payment system, Cash App.

The seller ecosystem is a larger part of the company’s business. Despite covid harming physical retailers, the company processed payment volume totaling $103.7 billion in 2020, down y/y by 13.6%.

Square is not dependent only on smaller businesses — making the company more resistant to economic challenges. In Q4, larger sellers with volume over $0.5 million made up nearly 60% of their total seller volume.

Cash App is a smaller but faster-growing segment of Square’s operations. The peer-to-peer platform’s active users increased y/y by 50% to 36 million in late 2020.

Individuals can use the Cash App for many financial tasks including investing in Bitcoin and stocks. Square’s revenues from such Bitcoin transactions increased by a whopping 785% in fiscal 2020.

Square is selling at right over 110x forward earnings. These valuations are expensive. But Square estimates its whole market to be over $160 billion. The company has its market penetration pegged to be under 3%. Considering the company’s 2020 revenues, the market share comes to 6%. The company also had profit of $213 million in 2020. With such a huge market size, this profitable company has much more room to grow.

2. Datadog

Cloud company Datadog offers solutions to monitor IT networks, infrastructure, applications and much more — on a unified dashboard. The company has benefited from the pandemic-driven digital transformation. While it has cooled off after their lower-than-expected fiscal 2021 numbers, the company is still very much in demand.

In 2020, the amount of Datadog customers spending over $1 million per year increased year over year by 94%, while those spending over $100,000 also grew by 46%. The company’s dollar-based net retention rate has been 130% for fourteen quarters in a row, which also includes Q4. At the end of last quarter, 72% of its customers were using at least two of the company’s products, while 22% utilized four or more. The company’s strategy has created a sticky customer list.

Last year, their revenues popped by 66% to $603.5 million, non-GAAP income was $71.6 million, and cash flow numbered at $83 million. For fiscal 2021, the company has estimated revenues to grow by 37% to 38% and net income per share to decrease y/y by 36% to 54%. However, the decline in earnings is not that large a challenge, considering that the company is prioritizing revenue growth over short-term profits.

Trading at almost 310 times forward earnings, it is pricey. But considering the company puts its possible market around $35 billion and is already a huge player in the observability space, there is great potential for it to reach even higher.

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3. Fulgent Genetics

Fulgent Genetics is a genetic technology company that has now transformed into a leading covid testing player and has great potential to increase even after covid is gone.

The company had a perfect run in 2020. Revenues went up by 1,200% to $421.7 million, while net income saw an explosion y/y from a negative $411,000 to a profit of $214.3 million.

Despite these incredible results, investors are anxious about covid testing revenues going away soon, which in turn will have a huge effect on the company’s growth. This concern is reasonable since most of the fiscal 2020 growth came from the virus testing business.

However, the future of the company’s non-COVID business — where they are using next-generation sequencing (NGS) technology to find 5,700 different genetic conditions based on certain mutations in over 18,000 genes at a cheap price– is now secure.

Fulgent’s price has already increased over 619% in the past year and over 82% in 2021. The company is now predicting a 90% y/y increase in 2021 revenues to $800 million, which is an amazing forecast after an already strong year. Given this, the company could soar again this year.

Shares of Tesla increased this week, rising almost 4% at the start of the week. The gain came after a top analyst gave the company a large price increase. Jed Dorsheimer, from Canaccord Genuity now believes the car maker could increase to $1,071 within the next year.

After the stock reached an all-time high of right over $900, it went sharply down in February and the start of March. Has this pullback given us a buying opportunity?

The next marker

Dorsheimer increased his Tesla price marker from $419 to $1,071. The analyst also changed his rating from hold to buy.

While Tesla makes use its revenue from cars, the analyst’s stock upgrade has to do with his prediction for the company’s energy storage sector.

He sees Tesla’s energy business bringing in $8 billion annually by 2025 thanks to an “Apple-like energy product ecosystem” and “harmonized electrification.”

Dorsheimer believes that as the company solves its battery cell shortage, they will be well positioned to expand the business through its energy product sales. He also sees Tesla being several years ahead of its competition in energy storage technology, giving it an edge.

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The momentum

Though Tesla’s car sales get more press, energy storage actually expanded faster in 2020 than car sales. Total energy deployments expanded by 83% in 2020.

“This increase was founded mainly by the Megapack product, our utility scale product., Tesla told investors during its Q4 update. “Powerwall demand is increasing as residential businesses continue to expand.”

Impressively, this came as production was limited. “Our energy business is supply constrained and our backlog is strong., Tesla said. But its push to increase production will help the firm boost supply “in the next three months.” Because of this, the car maker expects its energy business to increase at around the same growth rate in 2021 as it experienced in 2020.

While investors should do their own home work on Tesla, Dorsheimer’s upgrade does put focus on a very underappreciated part of its business.

There are already almost 100 stocks with values of over $300 million that more than doubled in 2021. And while it might be a challenge for most to hold on to those gains, let’s take a look at some stocks that could be just getting started. In fact, these three stocks could soon double yet again in 2021.

1. Upstart

Loaning money to people with below average credit scores has normally been a disaster, but it’s also a market that Upstart is overturning by using AI to make better bets in this lending niche. The company saw its revenue increase by 42% last year, and it’s about to get even better.

Its managers are calling for revenue to increase 115% this year. Their purchase of Prodigy Software should be finalized in June and the company will expand its reach into the auto loan market, which is ready for an AI-fueled competitor. More data means the tech company will get even smarter.

The stock is not cheap after almost tripling recently. Analysts doubled their predictions after March’s report, but we still believe Upstart will trade for over 200x this year’s predicted earnings. These multiples are not normal in the financial markets. But with the stock already 30% below its March top, it’s a good opportunity to buy a company that is about to slam on the accelerator.

2. Funko

Your collection of Funko bobbleheads and vinyl figures is not a passing fad. Shares of the stock have doubled this year on its surprising financial turnaround and its choice to capitalize on a hot craze.

Funko was producing double-digit annual revenue growth for four years before covid shrank the demand for its licensed collectibles. Revenue lowered by 18% for all of 2020, but analysts were not expecting sales growth to be positive during the holidays. The $226.5 million it reported in addition to the fourth quarter was only a 6% y/y increase, but Wall Street pros were awaiting a 8% decline. Weak international sales were accompanied by a whopping 18% increase in the U.S. market. Funko’s quarterly profit of $0.24 per share also went past the $0.14 that analysts were predicting.

Funko then announced a deal to buy a controlling stake in TokenHead, a leading platform for showing and tracking non-fungible tokens. Their TokenWave app has over 100,000 daily customers stopping by to see their list of 10 million blockchain-backed tokens. For all these reasons, the company is now in a perfect spot to be a major player in digital collectibles.

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3. AMC Entertainment

AMC is a company most investors connect with a fading industry. Even before covid, folks were staying away from movie theaters. AMC revenue was stagnant in 2019, and that was as the company gained market share as domestic sales declined 5% that year.

The pandemic has hit AMC hard, and the long-term outlook is dodgy. Consumers and studios have embraced digital content, and neither group has the patience for traditional releases where content is only shown on the big screen for a couple of months before leaving.

However, we have seen theater crowds spike in foreign markets. With 99% of AMC theaters now open, studios are ready to release hot movies that they have postponed until now. With events already eliminating the competition, AMC will have a big summer this year as people start to rediscover social settings.

AMC, Upstart and Funko have more than doubled in 2021. But the data and trends are there for this to possibly happen again before 2022 hits.

However, some people are anxious that this trend cannot go on much longer and that we are over due for a correction. While it is impossible to predict what is next, it is safe to say prices will eventually fall sooner or later.

When the market gets hit with a downturn, it is vital to be ready. Although nothing is completely safe, there is one investment better than any other at withstanding crashes.

Market crash preparation

Stock crashes are unavoidable, so your investments will eventually take a huge hit at some point. Also, timing your investment in an attempt to avoid downturns is very risky, and it is a strategy that’s almost impossible to get right.

Since no one can escape a crash, the best thing to do is find investments that can recover from downturns.

This can be hard, and requires research to find out if a company’s numbers will withstand market turbulence.

The perfect investment (if there were one)

One investment that reigns supreme when it comes to surviving market crashes, is the S&P 500 index fund. The S&P 500 is a market index that is linked to the entire market. Although it’s not totally unaffected by downturns, it has an amazing record of surviving every crash it has ever seen.

In the past 20 years alone, the S&P 500 has experienced the dot-com bubble, 9-11, the Great Recession, and now a global pandemic. But it has continued earning returns over the years.

By putting your money into S&P 500 index funds, it is extremely likely you will earn good returns over years — even if we have a crash in the short term.

S&P 500 index funds are among the safest investments possible. You might see your investments go down during times of volatility, but there is a great chance they will recuperate their value over time.

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The numbers

Although these funds are not 100% safe, you can make great money if you are patient. You need time to see larger returns, but this is well worth the wait.

The S&P 500 has gained 10% yearly, on average, since its start. So, if you are investing $300 a month in a S&P 500 index fund, and you are making a 10% return, here’s around how much you would have over time:

Years — Total Investment

5 — $22,000

10 — $57,000

20 — $206,000

30 — $592,000

40 — $1,593,000

Given time, it is possible to earn millions just by using S&P 500 index funds wisely. The trick is to save a lot and start early.

Where to go?

The following S&P 500 index funds are all great choices for starting index investing:

• SPDR S&P 500 ETF Trust (NYSEMKT:SPY)
• iShares Core S&P 500 ETF (NYSEMKT:IVV)
• Vanguard S&P 500 ETF (NYSEMKT:VOO)

All of these follow the S&P 500, and they all have low fees too. Making them a great investment. Market crashes are unavoidable, so be prepared. Use S&P 500 index funds and sleep easier knowing your money is safer.

Author: Steven Sinclaire