It was, to say the least, an interesting year in the stock market. After the COVID-19 outbreak plunged into a bear market with a record speed, the S&P 500 jumped back and then some. It sits at a profit of 16% with only a few days left in 2020.
However, many stocks performed much better, especially in financial technology or in the fintech space. Here are three in particular that doubled investors’ money or more in 2020, but which are still attractive over the course of 2021.
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3 Fintech shares that double investors’ money (or more)
I’m not keeping you in suspense. Here are three fintech stocks that have delivered a total return of 100% (or, in some cases, much more) over the past year.
Data source: YCharts. Total returns for 1 year ended 29 December 2020.
A look at the performance of each company explains why these stocks performed so well.
In Square’s case, its core processing business continued to perform well. The early success of its Online Store omnichannel platform is also encouraging. The true story, however, is Square’s Cash App, which has doubled its user base over the past year. On top of that, the company has done a fantastic job of earning the platform with features like stock trading and cryptocurrency exchange.
PayPal is in a similar situation. The online payments leader expects to add 70 million net new active accounts by 2020, doubling initial expectations. The company now has nearly $ 1 billion in annualized payment volume flowing through its platforms, including Venmo, which now has 65 million active users and a 61% year-over-year growth rate.
Last but certainly not least: disruptive real estate eXp World Holdings has more than 35,000 agents on its platform. It is growing at a remarkable rate. Over the past year, the number of agents and brokers on eXp’s platform has grown by more than 56% and the residential transaction volume closed by its agents has increased by 112% to $ 23.6 billion. As a result, eXp’s revenue and gross profit doubled year-on-year in the third quarter and nearly tripled its cash flow.
Are these still good fintech stocks to buy?
It is natural to wonder if a stock still has good value after such achievements. In all three cases, there can still be tremendous upward potential from here on out.
Square and PayPal still have a lot of potential to grow their core payment processing businesses. The pair currently process approximately $ 100 billion and $ 1 trillion in annual payment volume, respectively, but this is quite small compared to the global payment market of $ 185 billion. Plus, Square is still in the relatively early stages of earning its Cash app, and PayPal has barely capitalized on the revenue-generating potential of its massive Venmo platform.
While the growth of eXp is certainly impressive, and more than $ 90 billion in annualized transaction volume may sound like a large amount (and it is), it is still a relatively small fraction of the approximately $ 2 billion annual real estate transactions in the VS. also in Canada, the United Kingdom, Australia and South Africa, and the addressable market is therefore significantly larger.
The bottom line is that these companies emerged as big fintech winners in 2020, but there is no reason to believe that they will not continue to win. All three are entering incredible momentum in 2021 and can now still be smart additions to long-term investors’ portfolios.