Investors in bitcoin have been on a wild ride over the last couple of years, but have also learned a valuable lesson. As an accountant, I would never invest in bitcoin -- or any other cryptocurrency for that matter -- simply because there are no underlying assets. Rather than investing, this is more akin to gambling. While some people made fortunes investing in cryptocurrency, others lost their shirts when the majority of these digital assets recently lost half their value.
With that in mind we asked three top Motley Fool investors to choose companies that they believe provide a more traditional alternative to the cryptocurrency craze. They offered convincing arguments for The Boeing Co. (BA 2.58%), CRISPR Therapeutics AG (CRSP 0.74%), and NVIDIA Corporation (NVDA -1.11%).
The sky's the limit
Daniel Miller (The Boeing Co.): If you're apprehensive about buying into bitcoin, you're not alone. And if bitcoin is too risky or uncertain for your investing style, owning shares of Boeing is quite the opposite and could be a solid addition to your portfolio.
Not only has air travel been a resilient market over the past several decades, but Boeing management predicts that growth will be robust over the next two decades, with world commercial-aircraft deliveries topping 41,000 units for an estimated market value of $6.1 trillion. That's a massive pie out of which Boeing is well-positioned to carve a healthy slice.
While future demand is likely to be robust, Boeing already has a backlog of commercial aircraft and defense products valued at roughly $465 billion. With such a massive backlog, Boeing's near-term opportunity is increasing production rates with its high-margin products. Boeing's 737 production has jumped from 42 per month as recently as 2016 up to 57 next year.
The icing on the cake for Boeing investors is its dividend. The company increased its quarterly dividend 20% in December, to $1.71 per share. While that's only a 2% yield, Boeing has proven it will continue to dish massive value back to shareholders by significantly increasing its dividend.
If bitcoin is too risky for you, a stable company such as Boeing with an enormous backlog of orders, a healthy dividend, and significant anticipated industry growth over the next two decades would be a wise choice for investors.
This sci-fi tech is becoming a reality
George Budwell (CRISPR Therapeutics): Our ability to treat deadly genetic-based diseases has grown by leaps and bounds in the past decade, thanks to major advances in gene-editing technology. The latest iteration of gene editing, known as CRISPR and based on the Cas9 system, has the potential to radically alter the way we treat a range of blood-based disorders such as sickle cell disease and thalassemia, as well as a whole host of cancers and other genetically based diseases.
To this end, I think aggressive-minded investors may want to check out the clinical-stage biotech Crispr Therapeutics, a pioneer in the rapidly evolving CRISPR gene-editing space. Crispr is presently developing its lead product candidate CTX001 in conjunction with Vertex Pharmaceuticals as a possible treatment for both beta thalassemia and sickle cell anemia. If things go according to plan, CTX001 should become the first company-sponsored CRISPR-based therapy to enter human trials later this year.
From an investing standpoint, the truly compelling part of this story is that CTX001 could end up entering a pivotal-stage trial at a near record pace. This therapy, after all, is designed to be a functional cure for these single gene-based disorders, meaning that its effectiveness (or not) should be readily apparent even in a small number of patients. Success with CTX001 would also validate this platform in the general sense, which would greatly increase the value of Crispr's earlier-stage pipeline targeting various cancers or other genetically based diseases like cystic fibrosis.
Of course, this unproven tech could prove to be a dead end, and Crispr's shares would be worthless in that case. But there's a solid body of preclinical data suggesting that CRISPR may, in fact, be a game changer in the fight against dozens of life-threatening conditions.
Cash in on another massive trend
Danny Vena (NVIDIA): Laying out your hard-earned money for something that exists only in digital form -- and is notoriously hard to value -- is the worst form of speculation. Those looking for a potentially explosive investment backed by technology and an exciting emerging trend should consider graphics processing pioneer NVIDIA.
Investors can profit from the rise of digital currencies without the massive risk. NVIDIA developed the graphics processing unit (GPU) responsible for rendering graphics in video games, but found a secondary use in cryptocurrency mining -- the process used for verifying these digital transactions. That's led to a run on GPUs by those seeking to benefit from the cryptocurrency craze.
Gaming still produces more than half of NVIDIA's revenue, but there's another exciting trend that's been driving the company's impressive growth. Researchers have found that the massive parallel processing capability -- or the ability to perform complex mathematical calculations at lightning speeds -- that generates images for gamers, works equally well for the number-crunching needed for training artificial intelligence (AI) systems.
NVIDIA recognized the opportunity presented by AI early on and put its developers to work creating entire platforms geared toward solving the algorithm-intense challenges of AI. The company's data center segment, which houses sales from this emerging field, has produced seven consecutive quarters of triple-digit year-over-year gains and now accounts for nearly 21% of NVIDIA's revenue -- up from just 10% two years ago.
That's not the only significant trend that could benefit NVIDIA going forward. The company is investing heavily in the platforms that provide the foundation for the next generation of self-driving cars, a market that could begin to accelerate as early as next year and begin contributing significantly to revenue by 2022.
With NVIDIA, investors can get in on the ground floor of several once-in-a-lifetime technologies, without the inherent risk of gambling on bitcoin.