Most investors are looking for monster stocks: stocks that will grow quickly, making shareholders richer faster than sleepy stocks. It can be difficult to identify those stocks early, but it doesn’t really have to be. You can often do very well by buying great stocks after they have already posted many big gains.
Here are five stocks to consider holding for the next decade because they have a good chance of making impressive gains. If you don’t already own them, you can purchase some now and add others to a watchlist.
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|
Stock |
Average annual return over 10 years |
Average annual return over 15 years |
|---|---|---|
|
Nvidia (NASDAQ: NVDA) |
76.13% |
49.57% |
|
Netflix (NASDAQ:NFLX) |
31.05% |
35.68% |
|
MercadoLibre (NASDAQ: MELI) |
30.18% |
28.27% |
|
Metaplatforms (NASDAQ: META) |
22.19% |
N/A |
|
SPDR S&P 500 ETF |
13.10% |
13.92% |
Data source: Morningstar.com as of November 18, 2024.
For comparison, I also included the performance of a simple S&P 500 index fund. Now let’s take a closer look at each of the five stocks.
Semiconductor powerhouse Nvidia is a stock that everyone wishes they had bought many years ago, due to its phenomenal performance, especially in recent years. Nvidia used to be mainly known as a maker of gaming chips. It is still active in that sector, but is now also focusing on data centers, which require more and more chips as artificial intelligence (AI) technology spreads. The company is doing quite well in both data center chips and graphics cards for PCs used for gaming and more, with impressive market shares. (For example, it recently had 88% of the graphics card market.)
If you’re a long-term investor who owns Nvidia stock, I think you’d do well to hold on to it for many years to come. However, if you don’t own it yet, here’s some good news: the stock actually doesn’t look massively overvalued. For example, the recent forward-looking price-to-earnings (P/E) ratio of 36 is below the five-year average of 41.
Netflix is an even more well-known name, with a hugely impressive stock performance over the long term. Since launching as a DVD-by-mail rental service, it has grown into an entertainment giant offering plenty of original and non-original streaming content, including games and live sporting events.
Despite already having more than 280 million paid streaming memberships worldwide, Netflix is still growing, with revenue up 15% year-over-year in the last quarter and subscriber growth of 14%. It has a large market share lead over the competition and a lot of room to grow further, especially internationally.
With a recent price-to-earnings ratio of 34 near its five-year average of 36, Netflix stock seems fairly valued at recent levels, especially for long-term investors. The stock may not continue to grow at a high rate, but it should still grow in the coming years.
MercadoLibre is not a widely known name, especially since it has a large presence in Latin America, not the US. However, it’s worth getting to know the company because it’s been growing like gangbusters – and after a recent pullback the price is now lower offers an attractive buying opportunity.
Some have likened it to a combination of eBay And PayPalas it includes both a dominant online marketplace and a large “fintech” company. In its own words, it is “the leading e-commerce and financial technology company in Latin America, with operations in 18 countries,” with “a complete ecosystem of solutions for individuals and businesses to buy, sell, advertise , obtain credit and take out insurance’. , collect, send, save and pay for goods and services, both online and offline.’
The stock also appears attractively valued at recent levels, with a price-to-earnings ratio of 41, well below the five-year average of 85.
Finally, there are Meta Platforms, parent company of Facebook, Instagram, Messenger, Threads and WhatsApp. It also presents an intriguing buying opportunity, as the stock has pulled back a bit recently. That decline occurred despite the company posting strong revenue growth – with third-quarter revenue up a whopping 19% year over year. This was mainly due to management noticing the high expected spend on AI.
It’s hard to see Meta Platforms not growing vigorously in the coming years as it has a huge user base — billions from them – through its platforms, to which all kinds of money-making services can be offered. It’s already doing a good job at monetizing its users, with its operating profit margin growing.
So consider holding on to these monster stocks longer if you already own them, and if you don’t, maybe take a closer look at them to see if they deserve a place in your long-term portfolio now or later.
Have you ever felt like you missed the boat on buying the most successful stocks? Then you would like to hear this.
On rare occasions, our expert team of analysts provides a “Double Down” Stocks recommendation for companies they think are about to pop. If you’re worried that you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
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Nvidia: If you had invested $1,000 when we doubled in 2009, you would have $378,269!*
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Apple: If you had invested $1,000 when we doubled in 2008, you would have $43,369!*
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Netflix: If you had invested $1,000 when we doubled in 2004, you would have $476,653!*
We’re currently issuing ‘Double Down’ warnings for three incredible companies, and another opportunity like this may not happen anytime soon.
See 3 “Double Down” Stocks »
*Stock Advisor returns November 18, 2024
Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Selena Maranjian has positions in MercadoLibre, Meta Platforms, Netflix, Nvidia and PayPal. The Motley Fool holds positions in and recommends MercadoLibre, Meta Platforms, Netflix, Nvidia, and PayPal. The Motley Fool recommends eBay and recommends the following options: January 2027 long calls of $42.50 on PayPal and short December 2024 calls of $70 on PayPal. The Motley Fool has a disclosure policy.
4 Monster Stocks to Hold for the Next Decade — Including Nvidia, originally published by The Motley Fool
