When opportunity knocks, open the door. You've probably heard that old saying all your life. Too often, though, the knock is drowned out by other noises. With the current bear market, though, opportunities are banging on the door so loudly that no one should be able to ignore them.
There's a greater chance of making a lot of money during a bear market than there is in a bull market. If you question that, look back to 2008 and 2009. Buying nearly any stock of a well-run company during that period would have delivered fantastic returns over the next decade.
What if you don't have a lot of cash to put into stocks? No problem. If you have $5,000 (or even less), here are three stocks to buy right now that should make you a fortune over the long run.
1. Livongo Health
Livongo Health (LVGO) spotted its own big opportunity during the financial crisis of 2008. Founder and Executive Chairman Glen Tullman realized that there was a better way to help people manage their chronic health conditions. Livongo basically invented a new category of healthcare management that uses data to create personalized, actionable health signals that enable people with chronic conditions to live better and healthier lives.
This new approach was applied first to diabetes. And it worked really well. Livongo estimates that its platform delivers medical savings of more than $1,900 per year on average in diabetes management. If you think that kind of cost savings is attractive to employers and health plans, you're right. Livongo's customer base now includes over 30% of Fortune 500 companies.
The company's revenue soared 148% year over year in 2019 to $170 million. Its membership nearly doubled to 223,000. Livongo is still losing money at this point, but CEO Zane Burke told my colleague Brian Feroldi a few months ago that it's "on a march to profitability." Subscription-based business models like the one Livongo has can take a few years to reach break-even, but when they hit that point earnings usually skyrocket.
I think that's what will happen with Livongo. Based on the number of people in the U.S. with diabetes and hypertension, the total addressable market for the company is around $47 billion. And that doesn't include international opportunities. Livongo's market cap is close to $2 billion -- only a fraction of its potential market size. Buying this healthcare stock now should provide ginormous returns over the next few years.
In the past, data could be organized into tidy rows and columns like a spreadsheet. Databases were designed to support this easily structured data. That was then. Today, data comes in all kinds of formats that aren't structured at all. Videos, images, voice, text. The industry-leading databases simply aren't as good at handling this type of data. But MongoDB (MDB -0.99%) is.
MongoDB built its database from the ground up to support unstructured data. It also designed its database to run anywhere -- including cloud environments. That's enormously important with the massive migration of apps and data to the cloud.
It's not surprising that the company's primary growth driver is its Atlas cloud database-as-a-service product. Revenue generated by Atlas soared 80% year over year in the fourth quarter of 2019 and now contributes 41% of MongoDB's total revenue. Like Livongo Health, MongoDB isn't profitable yet. However, I think its subscription-based model will enable the company to turn a profit within the next few years.
The opportunity before Livongo is huge. CEO Dev Ittycheria wasn't exaggerating when he said in the company's Q4 conference call that MongoDB is "pursuing one of the largest and fastest-growing markets in all of software." The database market is expected to increase to $97 billion 2023 from $71 billion this year. MongoDB currently claims less than 1% of this market. I think that market share will rise and view this tech stock as a great pick right now.
3. Teladoc Health
My hunch is that one important long-term change that the coronavirus pandemic will bring is a big boost to telehealth. I think that patients will like the convenience of visiting healthcare professionals in a virtual setting, while payers will like the lower costs. And the undisputed leader in telehealth is Teladoc Health (TDOC 6.13%).
Teladoc has a wider geographical presence than any other telehealth provider thanks to several acquisitions the company has made in recent years. It also offers a broader range of healthcare services, including behavioral health. The company's customer base includes 40% of the Fortune 500 in addition to thousands of smaller organizations.
Over the last five years, Teladoc Health's revenue has increased by a compound annual growth rate (CAGR) of 55%. As is the case with Livongo and MongoDB, the company isn't generating profits yet. My view, though, is that profitability isn't too far around the corner.
Teladoc currently has around 56 million members, but there are another 73 million members that don't yet use its services at existing clients. That gives the company a big growth opportunity even if it didn't add a single new customer. Of course, Teladoc will almost certainly gain a lot of new customers, especially in the wake of the COVID-19 outbreak. Buying shares of this high-flying stock should pay off nicely over the long run.