HomeBusinessMy 2 favorite stocks that investors will invest in next year

My 2 favorite stocks that investors will invest in next year

Investing is not about living in the past, but about buying companies that will do well in the future. You want to buy stocks that can grow sales and profits while trading at a reasonable valuation. A tough task, especially if it is wide S&P 500 index is trading at a price-to-earnings (P/E) ratio close to an all-time high.

In bull markets, smart investors stray from the red-hot and popular stocks trading at nosebleed multiples of earnings. Instead, they focus on stocks that fly under the radar.

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Two of my favorite under-the-radar stocks that I think investors will flock to next year Coupang (NYSE: CPNG) And Ally financially (NYSE: ALLY). This is why I think the companies are fantastic buy-and-hold investments for the next decade.

One of the fastest growing large-cap stocks in the world is Coupang. The e-commerce platform, which started selling in South Korea and has now expanded to Taiwan, has seen its shares soar 70% year to date, crushing the performance of broad market indexes.

With almost half of South Korea’s population using its e-commerce website, Coupang is now ubiquitous Amazon in the United States and is expanding its lead over competitors. Last quarter, the South Korean e-commerce company’s net sales reached nearly $7 billion and grew 20% year over year at constant exchange rates.

Customers are drawn to Coupang’s ultra-fast delivery and the variety of services it offers with its premium subscription service Rocket Wow. Like Amazon Prime, Rocket Wow gives customers access to premium streaming video content, discounts on food delivery, and groceries delivered in just a few hours.

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Coupang has more ambitions than just being an e-commerce website in South Korea. It has a fintech subsidiary, has expanded internationally to Taiwan and has an in-house food delivery service called Coupang Eats.

These segments are combined into Coupang’s development offerings revenue line, which is growing like gangbusters. Last quarter, revenue for the segment increased 347% year-over-year to $975 million. Excluding the acquisition of fashion website Farfetch, the segment would still have grown revenue by 146% year over year this quarter.

Despite all these investments in growth, Coupang generates a positive net result. The company only had a small profit of $64 million last quarter, but can self-finance its reinvestment as it focuses on a market opportunity worth hundreds of billions of dollars per year.

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