The share prices of many companies have skyrocketed over the past year as investor sentiment has become optimistic that the economy could come back to life once the coronavirus pandemic is over.
But with the start of 2021, some investors are wondering which companies will still be good long-term investments after Wall Street’s march last year. That’s why it might be a good idea to invest $ 1000. Roku (NASDAQ: ROKU), Amazon (NASDAQ: AMZN), en Square (NYSE: SQ) now immediately.
1. Roku: A healthy growth stream
Roku has become a name in recent years as the number of active accounts using the company’s streaming platform has grown from 6 million in 2014 to 46 million in the third quarter of 2020.
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Roku’s video streaming platform, which is found on its streaming devices and embedded in many smart TVs, is not married to any streaming service, which means it is advantageous regardless of who wins the streaming wars. Whether it is now Netflix, Disney+, AT&Tsee HBO Max, appeal TV +, or whatever new service will come in the future.
In addition to Roku’s phenomenal ability to enter millions of households over the past few years, investors need to consider how the company is leveraging the fast-growing cutting-edge trend. Last year, an estimated 6 million people canceled their traditional pay-TV services, and many of them preferred to put together streaming services. Many people are abandoning traditional pay-TV, but think that by 2024, more than one-third of Americans will follow the same path.
Roku’s shares have risen 224% over the past twelve months, but when we see that we are still seeing a mass migration from pay-TV to streaming services, and the fact that Roku is the leading video streaming platform for such services, I think there are many opportunities for this share to beat the market in the coming years.
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2. Amazon: The e-commerce wave is just starting
Lockdown and social distances boosted e-commerce sales last year, and Amazon’s business experienced tremendous growth. The company’s North American sales increased by 37% and diluted earnings per share increased by 68% in the first nine months of 2020. Amazon had to hire 400,000 new employees just to keep up with the rising demand for e-commerce.
With a handful of COVID-19 vaccines already in circulation, at least some of the intense demand for e-commerce is likely to slow down until 2021. But investors should not think that demand will fall significantly.
E-commerce has certainly been accelerated by the pandemic, but instead of being just a temporary boom, it is more likely that the opportunity has convinced many e-commerce interests that online stores are here to stay. McKinsey’s research estimates that 70% of consumers plan to continue or even increase their online shopping once all social distance restrictions are over.
In the first nine months of 2020, only 14.5% of all U.S. retail sales were online, meaning there is enough room for online shopping to expand further. As the leading e-commerce platform in the US, Amazon is likely to experience some of the biggest benefits as this market continues to grow.
Image Source: Getty Images.
3. Square: A stock that is square in the fast lane
If you have not been following the technology industry for the past few years, you may not know much about Square. The company is a payment processing platform whose point-of-sale stations are popular among very small businesses and whose Cash app is a leading peer-to-peer payment mobile app.
Square is taking advantage of the massive shift from physical payments to digital payments and it is already experiencing phenomenal growth as it moves further into this market. It is estimated that digital payments will be worth $ 2 billion by 2025, and that Square will not be better able to leverage them.
The company’s Cash app has 30 million active users every month and its features have expanded to just peer-to-peer payments. For example, users can now buy and sell shares (and even cryptocurrencies like bitcoin) within the app. The number of active Cash App users is also increasing. In the third quarter, the number of active transactions with Cash App customers nearly doubled from the previous year, according to Square.
Square is a buy for the same reasons that Amazon currently looks like a buy. E-commerce is growing fast and there is probably no going back, even if the pandemic is over. And as more people are looking for easy and convenient ways to pay retailers in stores and pay each other, Square’s digital payment platform is likely to thrive.
One last thought
The stock market has been tearing up since March 2020 and its massive bull is dealing with economic uncertainty, a pandemic and political instability was slightly more than a little confusing. There is no guarantee that 2021 will bring the same market growth as last year, but long-term investors should not worry about it. Buying and holding these companies for at least five years should help you to overcome the declines you receive so that your investments can outperform the market.