Recently, two biotech firms have peaked the interest of Reddit traders. The allure of these two companies has much to do with their triple or even quadruple-digit gains over the past year.

There’s only one problem: When you look forward five-years, both of these stocks look deeply in the red.

Has Reddit selected another group of besieged businesses yet again, or are these two stocks in fact, turnaround stories that could make you rich?

1. Ocugen

Ocugen (OCGN) is a Reddit pick in part due to it co-developing and making a coronavirus vaccine that was originally created by Bharat Biotech. Given the world’s large demand for vaccines, the short-term potential of this deal could be huge. There is lots of room for more coronavirus vaccines to be given, but the details are where I believe Reddit has it wrong.

Bharat Biotech’s “Covaxin” vaccine has been proven to be effective and safe in phase 3 trials, but it has not received approval yet in America. That’s an issue.

Also, Ocugen’s deal to monetize only covers America, where vaccination is rapidly progressing with other vaccines already approved for sale. So, the revenue potential is maybe less than Reddit traders are wishing for.

Then, there is the fact that Ocugen will get just 45% of the profits from sales in America. The company is an early-stage biotech that does not yet have any clinical development projects and it is not a drug maker.

Without a history of profitably manufacturing anything and with a product developed completely by another company, it looks to be on shaky ground and investors should know it is much riskier than it might seem at first.

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2. Humanigen

Humanigen (HGEN) is another biotech company that Reddit loves and is also doing a coronavirus project. Instead of a vaccine, the company is developing its antibody therapy lenzilumab in phase 3 trials to test its effectiveness at saving COVID-19 patients.

In its recent update in March, the company reported that lenzilumab reduced the chances of needing a ventilator by up to 54%. That’s a very promising development, and investors should be excited. But again, the details are more complicated.

Certain populations are more likely to have a severe covid case when compared to younger people. But also, these vulnerable people are the ones most likely to be vaccinated against the disease. Around 65.9% of adults over 65 are already vaccinated. And those numbers will only go up.

So, with the market size decreasing, and Humanigen still having to finish its phase 3 trials and apply for approval before it can even start bringing in revenue. It’s obvious that Humanigen’s drug will save lives, but that does not mean a fortune for the company or the investors who invest in it.

Amazon (AMZN) has announced this week it will start using biometric technology at a Whole Foods store in Seattle that will let customers pay for their purchases with nothing but a scan of their palm print.

The system, called Amazon One, lets users link a credit card to their palm print, which they can use for payment.

Other Whole Foods locations will offer the technology soon, and this could be just the beginning. Amazon intends to license this technology, which it says will have a wide range of benefits for access and payments, including at stadiums, retail stores, and offices.

Amazon One was rolled out at the company’s cashierless Amazon Go stores to aid its entry. To sign up, customers simply put their card into a reader, hold their palm over the device, then follow the guide to link their card to their palm print.

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The technology uses computer vision to analyze the lines of the palm, creating a personal digital signature in seconds. Once sign-up is done, customers simply hold their palm over the contactless device at checkout to process a payment.

The e-commerce leader created the system to improve user experiences, including at checkout counters, entering a location, or showing a badge at work. Amazon says the tech is a “fast, reliable, and secure solution to identify people or authorize a transaction.”

But there is much more to Costco than its 0.9% dividend. Here’s a look at why investors might want to look at Costco stock at a deeper level.

More growth

Costco’s recent dividend boost was a big acceleration over the company’s 8% dividend last year. The dividend’s greater growth, however, is not a surprise given the company’s momentum.

Costco’s revenue increased 13% over 12 months and its earnings per share went up by 16% over the past 12 months. Further, Costco’s sales for the five-week time frame closing on April 4 went upward by 16%, with its same-store sales also increasing 11%.

Management is also looking to maximize e-commerce. With its online sales being up by 76% year over year. And even as the economy starts back, Costco still witnessed 55% growth in online sales during the five-week time frame closing on April 4.

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Costco’s other dividend

But here is what investors usually miss about Costco. The company has sometimes paid out large special dividends on top of its normal dividends. In 2020 the company paid a $10 special cash dividend. This was 14 times bigger than its quarterly payments.

While management never guarantees it will pay a special dividend, the payday for investors has been an almost normal occurrence. With $5 to $10 special payments being made in 2012, 2015, 2017, and 2020.

With so many special payments paid since 2012 — it’s safe to bet that Costco’s sub-1% dividend does not do the company justice when it comes to dividend payout.

Even better, the company’s regular dividend makes up under 30% of the company’s earnings. Meaning there is a lot of room for further growth in Costco’s dividend — especially with its earnings going up.

Costco’s excellent momentum, history of dividend increases and special payments, and low payout relative to income make this the perfect long term dividend stock for people looking for income.

With more AI companies going public now, let’s find out some more about two 21st century AI companies and if now is the perfect time for you to start investing into this powerful sector.

1. Mohawk Group

Mohawk Group is a small firm worth under $1 billion. The company is an early user of AI for online retail. The company’s system is named Artificial Intelligence Mohawk E-commerce Engine or AIMEE for short. And it is using this software to find investment opportunities. Some of these seem bizarre to me. But that’s the great thing about AI. The robot does not care about our emotions or bias. It makes choices only based on the data it is given.

Following AIMEE, the company bought Aussie Health, a firm that makes Enema Coffee. And it’s bought Spiralizer, a company that makes devices that slices food. It also owns Truweo with its Posture Correction device. Why is the company buying this weird selection of consumer companies? Their AI is relying on search data from Amazon, online reviews, the amount of third-party partners, and various other data that tells the AI where to invest.

What makes the company even more exciting is that they also license the AIMEE platform to any third-party seller who wishes to subscribe to it.

And while AI is not without problems, this data-driven strategy might give Mohawk the leg up over its competitors. Already the firm has reached profitability in its recent quarter. And Mohawk expanded its top line by 62% y/y in Q4. Despite this profitability, Wall Street is only giving this AI superstar a small multiple of 2.5 times sales right now.

2. Upstart

Upstart is a company giving small loans to people in the range of $1,000 to $50,000 dollars. The firm runs no credit checks to do this. Instead, Upstart uses AI to analyze roughly 1,600 data points to determine your risk. And if approved for a loan, 99% of loans are given within 24 hours.

Upstart does not loan the money itself. Instead relying on banking partners. That, right now, includes Cross River Bank, which originated two-thirds of the company’s loans in 2020.

So far, business has been good. Over $9 billion in small loans have already been given on Upstart. And 71% of those are completely automated. That means no human was involved at all. The AI investigated all the data points and approves the loan.

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If it works, it will be an incredible business, one that completely changes the banking industry.

Upstart says it experiences 75% fewer defaults than traditional underwriting methods. To support this claim, the company did an internal study back in 2017, with hypothetical default rates.

So far, the sales are increasing nicely. The stock price boosted when the company reported its Q4 numbers. It was not only the 39% growth that got traders revved up. Upstart also raised their estimates for the first quarter. And it was a big increase, calling for revenue growth in the triple-digit range.

Using AI To Transform Everything

Upstart and Mohawk are both fast-growing companies using AI to give themselves an advantage. Both of them are transforming huge markets. If either makes major inroads, early stock owners should get amazing profits.