3 brand actions that can turn $ 100,000 into $ 1 million
Patience has paid off again for investors. Following the fastest decline of at least 30% in the history of the benchmark S&P 500 (it took about a month to lose a third of its value), the widely followed index has risen 91% in the past 15 months.
While a number of high-growth companies that were previously off the radar have made significant gains for investors, it is branded stocks that primarily lead this charge. Just because a company is well-known doesn’t mean its growth rate slows down or that it can’t generate a shipment of money for its shareholders for investors.
If long-term investors stay patient with the following trio of branded stocks, they could very well see a $ 100,000 investment turn into $ 1 million.
It may not be as synonymous with payments as Visa or MasterCard are, but fintech stocks Square (NYSE: SQ) quickly became a household name in finance. The crazy thing is that, even after seeing its shares climb 900% over the past four years, Square still offers the opportunity to turn a $ 100,000 investment into $ 1 million.
Most people are probably familiar with Square for its very successful ecosystem of sellers. This segment provides point of sale devices, loans, analytics, and other tools to help traders succeed. In the seven years leading up to the pandemic, gross payment volume (GPV) made on Square’s network grew an average of 49% per year to reach $ 106.2 billion. Based on the $ 33.1 billion in GPV recorded in the first quarter of 2021, it appears to be on track to easily surpass $ 130 billion in GPV this year.
While greater adoption of Square’s seller ecosystem tools is helping drive GPV, what’s especially notable about this segment is that it is used by larger merchants. The percentage of GPV coming from sellers with at least $ 125,000 in annualized GPV increased from 52% in the first quarter of 2019 to 61% in the last quarter. Since this is an operating segment focused on merchant fees, large companies have the potential to really increase their gross profit.
However, Square’s main growth driver is the peer-to-peer digital payment platform Cash App. In three years, the number of monthly active users has more than quintupled to 36 million. To boot, each of these users generated $ 41 in gross profit. In comparison, it costs less than $ 5 to attract new monthly active users.
The great thing about Cash App is that it allows Square to generate income in a variety of ways. He can collect merchant fees, benefit from expedited bank transfers, and see a huge increase in income for people who use the platform to invest. In particular, Bitcoin Exchange has boosted the company’s revenue growth and attracted new users to the platform.
Suffice it to say, Square’s patient investors may well become millionaires.
Another branded stock that has all the tools to turn a $ 100,000 investment into $ 1 million is the Living and Accommodation platform. Airbnb (NASDAQ: ABNB). Unlike Square, Airbnb is not yet profitable. However, it has the potential to completely transform the multi-billion dollar hospitality and travel industry.
As you can imagine, Airbnb’s 2020 has been a year to forget. With the pandemic raging around the world, bookings have fallen across the board. What you might not realize, however, is how quickly Airbnb was growing before the pandemic (mainly because it wasn’t even a publicly traded company until December 2020). Between 2016 and 2019, the number of reservations on the Airbnb platform increased from 52 million to 272 million.
In addition, Airbnb has achieved this booking growth with “only” 4 million hosts worldwide. There are over 130 million homes in the United States, and probably over a billion around the world. Once homeowners realize the cash flow that could be generated from using their property for accommodation, Airbnb’s pool of available rentals should skyrocket.
Plus, Airbnb isn’t just about disrupting the traditional hotel model. It also aims to be a force once travelers reach their destinations. The Company’s Experiences segment is looking for local experts to guide travelers on their adventures. This segment is still in its very early stages of growth, but has the potential to create those “unforgettable moments” that bring users back to the Airbnb booking platform over and over again.
With sales expected to more than triple to $ 10.5 billion by 2024, Airbnb appears to be on track to become a leader in the travel industry.
Don’t be fooled by its $ 225 billion market cap. If a cloud-based customer relationship management (CRM) software company salesforce.com (NYSE: CRM) Continuing to grow at its current rate, it will have little problem turning a $ 100,000 investment into $ 1 million over time.
Without getting too technical, CRM software can be used by all businesses in contact with consumers to supervise their customers. It enables real-time information recording, resolution of product and service issues, and can provide predictive analytics for new products or services that existing customers might want to purchase. Global sales of CRM software have grown by a double-digit percentage each year and are expected to continue to do so for many years to come.
If you’re wondering where salesforce fits into all of this, it is at the top of the scale. According to IDC, the sales force controlled approximately 19.8% of the global market’s revenue share in the first half of 2020. Even with a number of new entrants to the cloud-based CRM space, the sales force holds nearly four times the share of its next closest competitor. , Oracle.
Salesforce CEO Marc Benioff also oversaw a number of smart acquisitions that either broadened the company’s service offerings or helped it attract a broader base of corporate customers. Currently, the sales force is in the process of acquiring Slack Technologies for what was billed as a $ 27.7 billion cash and stock deal. While this will add a new dimension to the sales force revenue stream, the real value of Slack’s cloud-based business communication platform is enabling the sales force to cross-sell to customers. small and medium businesses that use Slack.
Despite his megacap size, Benioff has his company on track to grow its sales from $ 21.3 billion in fiscal 2021 to at least $ 50 billion by 2026. If that pace of growth maintains itself, the sales force can become a brand millionaire.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.