Do you have $1,000? 3 smart stocks to buy right now
No one could have predicted the wild swings and sheer unpredictability of the stock market in 2020. While investors know to expect some risk when trading stocks, the market’s journey from lows to insane new highs angered some investors.
Now, as the market’s record streak continues on the heels of early news about the distribution of the COVID-19 vaccine and optimism over the federal government’s new stimulus deal, investors need to be pickier than ever when they choose stocks to buy. As you close the chapter on 2020, here are three smart stocks to add to your shopping list that could fuel enviable growth and bring winning returns to your portfolio over the next few years.
1. Fiverr International
Shares of the independent market leader Fiver International ( RVRF 10.25% ) reached a new premium this year, up 813% from January. During the third quarter (ended September 30), Fiverr achieved 88% revenue growth over the prior year period. One of the main catalysts for this impressive double-digit growth is the fact that active buyers on the platform have also increased by almost 40% compared to the corresponding quarter in 2019.
Fiverr also reported a growing number of freelancers taking advantage of its Promoted Gigs initiative, which allows sellers who meet certain eligibility criteria to increase their profile visibility to potential customers. Monthly active sellers on Sponsored Gigs increased by more than 2,000% between the second and third quarters of the year. Likewise, buyers on Fiverr are increasingly willing to spend more on quality freelance work. By the end of the third quarter, the average spend per buyer had risen to $195; this figure was $163 at the end of the third quarter of 2019. Fiverr expects its 2020 revenue to increase between 74% and 75% compared to 2019, a significant jump compared to the growth in revenue in 2019. 42% business last year.
The gig economy was certainly thriving before the pandemic. In February this year, the ADP Research Institute reported that “from 2010 to 2019, the share of gig workers in companies increased from 14.2% to 16.4%, an increase of 2, 2 percentage points, or 15%”. It’s also no surprise that supply and demand in the gig economy have reached new heights, as shutdowns, widespread layoffs and an increasingly remote workforce have pushed businesses and workers to explore alternative solutions to carry out their projects.
Fiverr’s simple platform makes it easy for qualified freelancers to connect with a wide range of customers, from individual businesses to well-known brands, and vice versa. Given the company’s impressive growth figures before the pandemic, its strong financial results throughout this year, and the ever-increasing popularity of remote solutions within the broader workforce, Fiverr is both a top growth stock of the pandemic era and a valuable play for long-term investors.
2. Abbott Laboratories
When the pandemic took the world by storm earlier this year, healthcare companies raced to develop accurate diagnostic tools for COVID-19. Abbott Laboratories (ABT 1.03% ) quickly stepped in and has since developed eight different tests to detect coronavirus infection. These tests range from molecular and antigen tests to antibody tests, several of which have been granted Emergency Use Authorization (EUA) by the United States Food and Drug Administration.
On Dec. 16, the FDA released a landmark EUA for the company’s BinaxNOW 15-minute portable antigen test, which will be used as the first “virtually guided, in-home service” for the diagnosis of COVID-19. Users should access Abbott’s free NAVICA app, available for iPhone and Android, to facilitate the test and read its result. The fee for the whole process is only $25. Abbott distributes test with digital health company eMedand plans to offer 20 million tests to the public in the first half of 2021.
Abbott’s diagnostic business has certainly helped her navigate the inconsistencies of the pandemic economy. Although the company’s sales in the first half of 2020 fell 3% from the first six months of 2019, global sales for its diagnostics division still increased by 2%.
Abbott’s strong performance in the third quarter eased all investor fears as it reported total sales growth of nearly 10% year-over-year. Also in the third quarter, global diagnostics sales increased nearly 40% year-over-year, while global nutrition and medical device sales increased margins by 2.6% and 3.4 %, respectively. Management was so pleased with Abbott’s performance that it not only raised the company’s full-year guidance, but also announced a 25% increase in its quarterly dividend on Dec. 11. Dividend Aristocrat which has increased payouts for 49 consecutive years, the company is just one year away from being crowned Dividend King. Investors looking for a reliable stock with highly diversified business and a healthy dividend yield (1.7%) should definitely consider Abbott Labs for their 2021 portfolio.
Social media stocks pretty much had a banner year all around, and pinterest ( PIN 5.75% ) is no exception. Shares of the company have fallen from around $20 in January to around $70 at the time of this writing.
Pinterest saw above-average revenue growth before the pandemic (51% in 2019) and continued to see healthy revenue increases throughout this year. The third quarter was Pinterest’s best of 2020 so far, in which its revenue grew about 58% year-over-year. In the previous two quarters, the company had seen lower but still excellent year-over-year revenue growth of 35% and 4%.
There was some other information of interest to current and potential investors in Pinterest’s third quarter financials. On the one hand, Pinterest reduced its net losses by 24% compared to the period of the previous year, while increasing its non-GAAP net profit nearly 1,400% year over year.
Growth relief often comes at a cost to businesses, often in the form of growing debt. But not in the case of Pinterest. The company has assets ($2.3 billion) that far exceed its total liabilities ($366.4 million). And management expects Pinterest to achieve 60% year-over-year revenue growth in the last quarter of 2020. Pinterest is a stock you can easily buy and hold for the next decade or more.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.