Investing in 2020 has been an adventure, especially if you are new to the world of investing. During the first quarter, the coronavirus pandemic created never before seen levels of panic and uncertainty, driving the broad S&P 500 lose 34% of its value in less than five weeks. At the same time, we also saw the strongest rebound from a bear market rally to new all-time highs in the history of the stock market.
If there is one key theme that stands head and shoulders above the wild volatility we have seen in 2020, it is that long-term investing is a winning strategy. Since its inception, the S&P 500 has finally put every single bear market and correction in the rearview mirror. In other words, patience pays off on Wall Street.
Another thing that almost always pays off is investing in explosive and revolutionary growth stocks. Since they can offer so many long-term benefits, you don̵
Yes, the tech sector is home to many game-changing investment opportunities. But don’t underestimate the healthcare industry or the telemedicine giant Teladoc Health (NYSE: TDOC).
Many people like to point to COVID-19 as the reason behind the increase in virtual doctor visits, and to some extent they are right. Teladoc’s June quarter saw total visits increased by 203% over the prior year period, with physicians wishing to keep high-risk patients out of offices and hospitals as much as possible.
But here’s more at work than the pandemic driving virtual visits. Teladoc was already seeing explosive growth well before the pandemic. Between 2013 and 2020, full-year revenue could jump from $ 20 million to $ 1 billion, which is good enough for a compound annual growth rate of 75%.
The thing to know about telemedicine is that it is a win for the entire healthcare space. Telemedicine visits are generally less expensive than office visits, which saves insurers money. In addition, they allow doctors to include more patients in their program and offer superior convenience to patients who can talk to their doctor from the comfort of their home.
Teladoc is also in the process of acquiring a specialist in applied health signals Livongo Health (NASDAQ: LVGO) in a cash and stock deal worth $ 18.5 billion. All Livongo has done is consistently double its diabetic members on a year-over-year basis and report three consecutive quarterly profits, while delivering triple-digit sales growth. Livongo’s focus on people with chronic illnesses and his reliance on artificial intelligence to help those people by sending them tips and pushes to make lasting behavioral changes will blend seamlessly with Teladoc’s precision medicine operating model.
Although the marijuana industry has faced some serious growth problems over the past 18 months, we are seeing a clear fork between the US and Canada. The second remains a disaster, while the first is a long-term investment opportunity. That’s why vertically integrated multistate operator Cresco Labs (OTC: CRLBF) it should be on the investor buying list.
What is worth noting here is that the United States is the largest marijuana market in the world, and it will remain so even if the federal government decides not to legalize cannabis. About two-thirds of all states have given the green light to medical marijuana, with 11 also flying the green flag on adult use. In November, we will have five more states voting on a legalization initiative. The federal government has made it clear that it will maintain a hands-free approach, thus rolling out the proverbial green carpet for U.S. marijuana stocks.
More specifically for Cresco Labs, it has two broad growth opportunities. First, there are the company’s wholesale operations. Traditionally, cannabis wholesaling has been a relatively low-margin business. But Cresco’s acquisition of Origin House, completed in January, will give the company the volume it needs to make these margins profitable. This is because Origin House is one of the few select companies to hold a cannabis distribution license in California, the world’s most profitable marijuana market for annual sales. Having a distribution license in the Golden State gives Cresco the ability to place potted products in more than 575 dispensaries.
Second, Cresco Labs has a thriving retail business. While the company has nothing to do with the number of licenses from other multi-state operators, it is looking to claim a significant stake in Illinois, which opened its doors to adult-use weed on January 1, 2020. With nine With offices open in the state and Lincoln Land expected to reach $ 1 billion in annual sales by 2024, Cresco is poised to reap the rewards of the rapid growth of cannabis in the US
Among the tech stocks, there are a number of explosive growth industries to choose from, such as cloud computing, artificial intelligence (AI), and the Internet of Things. But when the critical time comes, few offer the reliability of cybersecurity. Here because CrowdStrike Holdings (NASDAQ: CRWD) makes a purchase so intriguing.
To be clear, CrowdStrike isn’t cheap. It is worth nearly 27 times next year’s sales, which is bloody territory for value-focused investors. But this is also a company that is likely to triple its revenue over the next couple of years and see its operating margins increase as time goes on.
The beauty of CrowdStrike’s operating model is twofold. First, we have seen cybersecurity become a basic service. No matter how bad the US economy is, hackers and robots don’t take their time. With businesses being forced online and / or in the cloud as a result of the pandemic, we are seeing a greater emphasis on securing the cloud, and that’s great news for CrowdStrike.
The other important component here is that CrowdStrike is seeing a sharp increase in spending from existing customers. While registering new customers is important and not particularly difficult to do during the pandemic, what matters most is that existing customers grow and purchase additional cloud module subscriptions. Existing customers who spend more will be responsible for increasing CrowdStrike’s margins.
As of the July quarter, CrowdStrike has seen the number of current customers with at least four cloud module subscriptions reach 57%. It increased from 55% in the sequential quarter (Q1 2021) and only 9% in the first fiscal quarter of 2018 (i.e. 13 quarters ago). This is a large-scale growth indicative of a popular, AI-powered, cloud-native cybersecurity platform.