This has been a crazy year for the investment community. Although instability is always present in the stock market, we are witnessing the steepest decline in the bear market in history in the first quarter, as well as the fiercest rebound to new heights in the bear market. It is fair to say that 2020 has tested investors’ determination like never before.
But this is especially an experience for millennial or novice investors who may not have navigated the bear market before.
The online investing app Robinhood has gained millions of new members this year, with 31 being the average age of users. Although the platform ranking (ie the list of its most owned shares) includes a handful of well-known and time-tested companies, millennial and budding investors are also attracted by their fair share of terrible companies.
However, investing should not be complicated for Robinhood investors. They just need to change their game plan to think about their investments for years, not days, weeks or months. The next four stocks are great companies that Robinhood investors can confidently buy and hold for five years or more.
What is an easy way to get young people excited about investing? Allow them to buy from a high-growth company that many can contact: Pinterest (NYSE: PINS).
Pinterest on social media Pinterest has not faced the same growth issues that have plagued other platforms that are not listed Facebook. In the quarter ending June, Pinterest noted that its number of active members increased by 116 million (39%) from the previous year to 416 million, with the majority of these users located outside the United States. The bad news is that the average consumer income outside the United States is significantly lower than the ARPU inside the United States. However, Pinterest doubled more than the international ARPU last year, and the growth of ARPU abroad is a big reason why it can provide sustainable double-digit sales growth ahead.
Pinterest is also a thriving e-commerce opportunity. You may think of Pinterest as a fun place to capture products, services, or places that interest you. Pinterest sees these hanging boards as the perfect opportunity to connect motivated users with small businesses specializing in their interests.
Look for Pinterest to be possibly the most effective social media company in this decade.
Robinhood’s ranking shows that its members are attracted to companies researching the coronavirus vaccine. I’m not a big fan of the pursuit of what can be a crowded and unpredictable space. I would rather suggest that Robinhood investors buy a proven high-growth biotech stock Exelixis 09.30 NASDAQ: EXEL.
Exelixis is a cancer drug developer that primarily drives Cabometyx cocktails to significant growth. Cabometyx failed in prostate cancer studies in 2014, but ultimately proved successful in reaching its primary endpoint in the treatment of first- and second-line renal cell carcinoma and hepatocellular carcinoma. These readings must be combined for over $ 1 billion in peak annual sales.
But Exelixis is not over there. With plenty of cash flow coming from its operations each year, the company has rebuilt its internal research segment. He also has about six dozen ongoing clinical trials examining Cabometyx as monotherapy or combination therapy. This includes a phase 3 study that saw Cabometyx and Bristol Myers SquibImmunotherapy Opdivo conducts rounds in the previous Sutent care standard in first-line RCC.
Exelixis will be making money in the coming years, while enjoying double-digit growth potential from Cabometyx.
Millennial investors are also fans of investing in marijuana stocks. Although there are many great American pot stocks to choose from, Robinhood members cannot buy over-the-counter companies. Thus, instead of focusing on direct players, a high-growth subsidiary GrowGeneration (NASDAQ: GRWG) it looks like smart buying and holding.
GrowGeneration currently has 28 stores open in 10 states and is responsible for providing a range of hydroponic solutions as well as lighting, soil and nutrients for cultivators. As 34 countries have given the green light to medical marijuana in the United States, there are many opportunities for cultivators to improve yields and reduce production costs. GrowGen aims to open 50 stores by the end of next year.
What is impressive about GrowGeneration is how many different ways it can expand its top line. We are witnessing stable organic growth from existing places. Since 2014, the company has made approximately a dozen acquisitions to expand its product portfolio and reach. The company has also launched a private label program to improve repeat business and strengthen its margins.
Everyone knows that direct players in the sweat industry are growing like weeds, but GrowGen has shown that it can keep up with the multi-state operators in the sales growth department.
There is probably no more consistent double-digit growth trend in this decade than cybersecurity. With the new coronavirus, which completely changes the traditional office environment, more employees are working remotely than ever before. This means a growing emphasis on storing data in the cloud, as well as protecting that data.
The cybersecurity company that Robinhood investors should consider buying and holding for at least the next five years is Octa (NASDAQ: OKTA). This company offers a diverse portfolio of authentication solutions that rely on artificial intelligence to become smarter over time. Okta’s product portfolio is designed to grow with its customers – who grow more inclined to add new protections as they grow. That existing customers spend more is Okta’s plan to expand the margin.
In addition, most of Okta’s revenue – 95% to be exact – comes from subscriptions. Subscription revenues tend to be profitable and this reduces the chances of unsubscribing. In the quarter ended July, Okta’s gross margin reached a solid 74.5%, up 210 basis points from the previous year.
Okta is by no means a cheap stock, but it offers a basic service in today’s growing digital economy. This suggests that additional growth remains.