History has shown time and again that it doesn’t matter when you invest, but rather how long you stay invested that gives you the best chance to build wealth. Thus, even with the broader market near an all-time high, there are still ample opportunities for long-term investors to get rich.
Best of all, you don’t need to have Warren Buffett’s pocketbook to make money in the stock market. If you have, say, $3,000 at the ready, which you won’t need to pay bills or cover emergencies, this is more than enough cash to buy the following supercharged stocks, all of which have the potential to triple your money.
Palo Alto Networks
Although you can find faster-growing industries this decade, you probably won’t find a more surefire opportunity for growth than cybersecurity. The pandemic forced businesses to accelerate their push online and into the cloud. When coupled with continuous attacks from hackers and robots, demand for cybersecurity solutions is greater than ever. That’s why sinking $3,000 into Palo Alto Networks (NYSE:PANW) can triple your money.
Palo Alto is in the midst of a transition that’s seen the company de-emphasize physical firewall products in favor of cloud-based cybersecurity solutions that rely on artificial intelligence and machine learning. This allows its solutions to become more efficient at recognizing and responding to potential threats over time. Cloud-based systems are often nimbler than on-premises security solutions, and in many cases they’re cheaper, too.
For Palo Alto, shifting to a subscription-based software-as-a-service model means less lumpy revenue recognition, as well as higher margins. In the April-ended quarter, 73% of revenue came from subscriptions, up from 68% in the year-ago quarter.
Furthermore, Palo Alto also has a knack for making smart bolt-on acquisitions. These deals typically widen the company’s suite of security solutions and/or make Palo Alto accessible to a broader swath of enterprise customers. Between its organic and inorganic opportunities, sustainable double-digit growth should be the expectation.
Another supercharged growth stock that can triple your money is edge cloud services company Fastly (NYSE:FSLY).
Interestingly, the big catalyst for Fastly is extremely similar to that of Palo Alto. Namely, we’re seeing businesses and content consumption shift online. That’s meant enhancing the online experience, which is where Fastly steps in to expedite the delivery of content to end users in a secure manner.
As you can imagine, the pandemic was the perfect opportunity for Fastly to showcase its solutions. With more businesses and people than ever working remotely and accessing the internet, demand for Fastly’s services soared. But I believe the most-telling event of 2020 was the company easily overcoming ByteDance pulling traffic off of its network in the third quarter. ByteDance is the parent company of TikTok, and it was embroiled in a battle with the Trump administration stateside at the time. Even though ByteDance was Fastly’s largest customer, revenue still grew more than 40% the third quarter. In other words, Fastly showed the world that it’s critical to a wide swath of fast-growing customers.
Another reason Fastly has the potential to become a future juggernaut is the conviction its longtime customers have in its services. Over the previous three quarters, the company’s dollar-based net expansion rate (DBNER) came in at 147% (Q3 2020), 143% (Q4 2020), and 139% (Q1 2021), respectively. What DBNER tells is that Fastly’s existing clients from the year-ago quarter spent a respective 47%, 43%, and 39% more the following year.
Despite losses widening in the short-term as the company increases its headcount and invests in its platform, Fastly has all the tools to make patient investors a boatload of money.
Don’t let large market caps keep you from investing in great businesses. Though the days of social media giant Facebook (NASDAQ:FB) tripling in a year or two might be gone, this is a business that can still easily triple long-term investors’ money.
The easiest way to understand Facebook’s dominance is to dig into its operating data. When March came to a close, 2.85 billion people were visiting its namesake site on a monthly basis, with another 600 million unique visitors heading to Instagram and/or WhatsApp, which Facebook also owns. Combined, we’re talking about 3.45 billion people utilizing a Facebook social platform at least once monthly. With such a broad audience of users, and the potential to target those users, it’s no wonder advertisers will pay whatever is necessary to get their message on Facebook.
But it’s not just the sheer number of users that’s so compelling. Despite pacing more than $100 billion in advertising revenue in 2021, only Facebook and Instagram have been meaningfully monetized. This means that when WhatsApp and Facebook Messenger are eventually monetized, Facebook could have another sustainable growth and profit surge.
And don’t forget about Facebook’s ancillary segment potential. The company’s Oculus virtual reality (VR) devices could make the company a leader in VR, and were likely the driving force behind Facebook’s “Other” revenue skyrocketing 146% in the first quarter to $732 million. Facebook also has the potential to become a financial services or streaming player, too.
For a company with a nearly $1 trillion market cap, Facebook is historically inexpensive at just 23 times Wall Street’s forward-year earnings forecast.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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