Everyone is looking for stocks that can change to the next Apple or Microsoft. After all, getting the stock right early in corporate life can cost you as much as 1,000 times your money or more, provided you choose wisely and last longer.
What are some of the qualities of companies that give rise to these life-changing benefits? A market with a large and growing address are good places to start offering a strong, dominant product or service. Add in great management, preferably from a passionate and invested founder-CEO, and you can just be yourself a candidate for 100-bagger returns.
There are three stocks today, with such tantalizing possibilities, to close on July.
Crowdstrike Holdings (NASDAQ: CRWD) Since the initial public offering in June 2019, the company’s shares have risen more than three times the IPO price. Yet despite its high valuation and success to date, things can begin to build up for this cyber security disruption, with a much longer time horizon for the investor.
Crowdstrike carries a lot of long-term winner materials. First, the cyber security market is large and evolving, and it is likely to receive a large acceleration from the COVID-19 epidemic, as new solutions are necessary to secure a remote and distributed workforce.
Grand View Research puts the global cyber security market at $ 156.5 billion in 2019, growing at an average annual growth rate of 10% through 2027. This is a very high growth rate for the market which is already very large. Even better for CrowdStrike’s cloud-based product, enterprise spending on cloud-specific security solutions is small, but projected to accelerate to 26.5% average growth through 2023. Compared to Crowdstrike’s mere $ 563 million in revenue over the last 12 months, and little to walk into the room there.
Crowdstrike also appears to have a winning business model that benefits from powerful network effects. The company’s Falcon endpoint module allows access to all devices connected to an enterprise’s network on the cloud, allowing CrowdStrike’s solutions to deploy more easily than hardware-based solutions that prevent threats on a single physical node.
All endpoints were served by Falcon compared to relay attack data in the company’s Centralized Threat graph, which uses all that data and artificial intelligence to refine and improve its threat detection algorithms. Thus, the more customers CrowdStrike gets, the better its offering becomes, which in a virtuous cycle, helps to earn more customers. Investors can see this last quarter’s eye-popping 85% revenue growth, 89% subscription revenue growth and, importantly, a 500-basis-point-increase in gross margin.
Add in George Kurtz, a highly invested CEO and co-founder who owns 8.4% of the company’s total shares, and CrowdStrike may be one of those stocks that would look like a spectacular buy years down the line.
Another industry with potential for large-scale growth is the plant-based food industry. “Traditional” global meat is a $ 1.4 trillion business. Yet the plant-based meat industry captured a small or less than 1% market share of just $ 12.1 billion in 2019, and is expected to grow at a 15% annual rate between now and 2025.
However, the category leader Beyond flesh (NASDAQ: BYND) Is growing much faster than that and has aspirations to accelerate adoption of that projected customer. Last quarter, Beyond reported 141% revenue growth. Certainly, this was a major slowdown from a truly monumental 239% growth record throughout the year 2019, but even in the first quarter, the food service segment beyond was grinded to a standstill as the epidemic spread. Beyond growth also exceeded the overall industry’s growth of 54% and was six times the growth rate of its nearest competitor.
Beyond Meat made a big splash when it produced notable meat like Beyond Burgers, the company’s main product from which it received a majority of sales. However, thanks to high relative R&D spending, we can expect much greater innovation in the present and future. Partner KFC has created a new Beyond Fried Chicken product in Southern California this month, which is included in Beyond’s formidable list of top-tier QSR restaurant partners.
Beyond victory over big partners has helped spread awareness for the brand, as was the strategy to place Beyond Burgers in the meat section of the grocery store instead of the vegetarian / vegan section. Early leadership has also brought a long list of celebrity endorsers to Beyond’s brand, showing early product leadership and network influence from savvy, modern marketing strategies.
The Millennial generation is clearly moving towards healthier, more environmentally friendly products, which should lead to industry-changing development in the years ahead. Beyond a passionate founder-CEO at Ethan Brown, who owns a significant 5.3% of the company’s stock, Beyond Meat continues to be a good bet to adopt and drive plant-based meat worldwide.
The potential for long-term game-changing returns is not just for US companies. Chinese financial technology upward OneConnect Financial Technology (NYSE: OCFT) As of December of 2019 there is another recent public company, and since that time the stock has already appreciated 2.5 times. Nevertheless, this high-rise Chinese fintech is poised for even greater things in the long term.
OneConnect is a leading cloud software platform that specifically leads the Asian financial sector. Its various cloud software modules utilize artificial intelligence and cloud-based technology in customer acquisition, customer service, underwriting, compliance and other back-office functions. You can almost like it salesforce.com, But tailored specifically for Asian banks and insurance companies.
OneConnect was formed under the insurance giant Ping An (OTC: PNGA.Y) And a lot of benefits from this association reads. Not only did the highly profitable Ping serve as a backstop customer and source of capital, but its 30-year financial data also informed OneConnect’s algorithm, making it a competitor.
While the COVID-19 epidemic hurt OneConnect’s results last quarter, the company still posted an impressive 29.6% revenue growth, including 50.4% from customers outside of Ping An. Crucially, gross margin nearly doubled to the rate of revenue, 58.1% in the quarter, which is significant as the company is still entering huge net losses. Meanwhile, the epidemic has only implemented the need for financial companies to adopt digital-first solutions, so the epidemic may actually accelerate the adoption of OneConnect.
OneConnect has bombarded the good news this month, as the newly public company was included in the FTSE Global Index Series, and also won a contract to service Hainan, China’s largest free trade port. Yet in the long run, I think even bigger returns are in store for OneCoin.
Most of OneConnect’s revenue is tied to customer usage, so financial companies across Asia are adopting OneConnect’s digital-first solutions, with OneConnect’s growth investors should continue for years to come.