Investing in 2020 has been challenging, to say the least. Over a period of roughly six months, the stock market fell at a faster pace than ever before, as well as rebounding faster than the new high. We expect it to proceed once in a decade, but not in a few months.
But just because equity has firmly pushed the March 23 coronavirus crash into the rearview mirror and has survived a streak of erasing all bear market declines throughout history, we have not seen an end to volatility. The unemployment rate is still historically high, there is no certainty when it comes to the coronavirus disease 2019 vaccine (COVID-19) vaccine, and we have an election coming up in less than seven weeks that does not provide any guarantee at this time is.
However, instability does not have to be your enemy. This can actually be your ally if you have a long-term investment horizon and a willingness to buy high-quality companies at a perceived discount.
Best of all, you don’t need to have a mountain of cash on hand to make money in the stock market. If you can give a discount of $ 300, which will not be required to cover emergencies or pay bills, then you will have more than enough money to buy the following great shares.
When it comes to the trend of steady growth over the next decade, cloud computing and cybercity are probably at or near the top of the list. So why not buy a better cyber security company whose solutions were built within the cloud? Combining the best of both worlds, I give you Crowdstrike Holdings (NASDAQ: CRWD).
If growth stock is your thing, then you’ll love crowdstrike. Over the past three years, the company’s number of subscribers has increased by 176%, 103% and 116%, respectively, year-on-year, with its fiscal second quarter operating results pointing to a 91% increase from the prior. -Your period. Before you start crying to the wolf about “slow growth”, remember that the recently ended quarter was the most challenging for the US economy in decades.
In addition to rapid customer growth, CrowdStrike’s current customers are spending too much. During the first quarter of FY 2018, only 9% of its subscribers had four or more cloud module subscriptions. As of the second quarter of fiscal 2021 (13 quarters later), the figure is up to 57%. Crowdstrike’s Artificial Intelligence Added platform is scaled, and its margins depend on spending more on existing customers.
As a last note, CrowdStrike generates 93% of its revenue from subscriptions. A customer-based model provides highly transparent and predictable cash flow, with very few customer churns.
Elanco Animal Health
I’ve said it before, and I’ll say it again: Never bet against the US pet industry. That’s why Elanco Animal Health (NYSE: VEG) There is a company that should be bought by opportunistic investors during increased volatility.
How stable is the American pet industry? According to spending data from the American Pet Products Association, we have not seen a drop in spending on companion pets for more than a year in at least a quarter of a century. This year, with $ 30.2 billion on animal care and product sales, an estimated $ 99 billion will be spent on our adopted members of the family. For three decades, pet ownership has done nothing but increase in the US, and the industry has proved itself virtually recessionary.
Recently completed acquisition of how exciting Elanco Animal Health BayerAnimal Health Unit for $ 6.89 billion in cash and stock. The deal makes Alanco the second-largest animal health company, and juices the combined company’s product pipeline, which is now expected to see 25 new treatments by 2024.
In addition, Elanco and Bayer Animal Health should save up to $ 300 million in annual cost synergies and provide meaningful margin expansion, given that half of the company’s sales now derive from the companion animal segment.
When volatile, investors usually seek safe-haven investments. Over the next few years, some industries may offer protection like gold stocks, which is why my personal favorite SSR Mining (NASDAQ: SSRM) Worth your time.
In all my years of investing in the stock market, the catalyst for the gold market has never been right. Global bond yields have declined, and the Federal Reserve has promised to keep lending rates low for many years to come. To boot, the Fed is also ballooning the money supply with its historically unlimited quantitative easing initiative. This means that we have a balloon-giving money supply that will generate safe income by putting pressure on the US dollar and some income that will increase inflation. In other words, the sleeping area is going to be daytime.
More specific to SSR Mining, it closed its tie-up with Alacer Gold on Wednesday 16 September. The all-share deal enables the company to produce 780,000 ounces of annual gold, with a healthy net cash position and 450 generating capacity. Million in annual free cash flow through 2022. I doubt we will see a dividend and / or share repurchase program, which will not be overcome in the future.
In addition, SSR Mining suffered considerable beating in August after reporting its second quarter operating results, which resulted from the closure of the COVID-19 mine. These closures were precautionary, requiring government regulators, and fully expected, meaning the decline in the company’s share price is not minimal. With all the mines currently up and running, SSR Mining is done to surprise Wall Street with its potential.
Green Thumb Industries
Finally, investors should consider taking $ 300 and working in one of the most promising marijuana stocks in North America, Green Thumb Industries (OTC: GTBI.F).
You may not think of cannabis as a safe place to plant your money amidst increased market volatility, but marijuana has served as a consumer staple during the coronovirus crisis. This would suggest that the industry is relatively recession-resistant.
For Green Thumb, it is a lightning rod for rapid development. The company operates 48 retail locations in the US, but has licenses to double its store count to 96. In total, it will have a retail, processing and / or farming presence in a dozen states, many capable of $ 1. Billion in annual weed sales by mid-decade.
In my view, the most exciting growth potential of Green Thumb would come from Illinois and Nevada. Illinois is a state with a limited license that opened its doors to recreational pot on January 1, 2020. Meanwhile, Green Thumb bought its way into the Nevada market through the Integral Associates acquisition. By 2024, Nevada could lead the nation in cannabis spending per capita.
But what makes Green Thumb the most attractive is that about two-thirds of its sales are sourced from high-margin derivatives (eg, edibles, vapes, beverages, tinctures and topicals). This product mix is the reason why Green Thumb appears ready to be turned into a corner for recurring profitability.