This has proved to be a challenging year for Wall Street and investors. The coronavirus disease 2019 (COVID-19) pandemic has led to unprecedented stock market volatility, with the benchmark S&P 500 losing 34% of its value in less than five weeks during the first quarter, then delivering its best quarterly performance in 22 years during the second quarter.
But on the bright side, periods of heightened volatility and panic have always been a good thing for opportunistic investors looking for great businesses at a discount. Since every stock market correction in history (prior to COVID-19) has eventually been erased by a bull market rally, it's only logical to assume that a new bull market will push equities higher.
The best part about investing in the stock market is you don't need to have Warren Buffett's wallet if you want to succeed. An investor with $10,000 in disposable cash that won't be needed for bills or emergencies has more-than-enough capital to seize the reins of their financial future. If you have this sort of dry powder to spare, consider buying into the following four unstoppable stocks.
Few industries are likely to have more momentum over the next decade than cybersecurity. That's why, even after its incredible run over the past couple of months, Ping Identity (PING) is a stock that investors should be buying.
The beauty of cybersecurity solutions is that they're not optional. No matter the size of the company or the current economic environment, hackers don't take a day off. Cybersecurity has evolved into a basic-need service for pretty much all enterprises, which is a big reason online and cloud security companies offer double-digit sales growth potential for as far as the eye can see.
What Ping Identity brings to the table is artificial intelligence and machine-learning solutions that'll help weed out unwanted people and robots accessing a company's sensitive information. Ping's cybersecurity solutions are evolving to apply two-factor authentication in situations where identity questions arise. This dynamic approach to data protection should lead to healthy sales growth for the company.
Furthermore, 93% of the company's first-quarter sales were derived from subscriptions. That's great news, because subscription revenue leads to highly predictable cash flow and little client churn.
At the beginning of the year, I said healthcare solutions company Livongo Health (LVGO) could double. More recently, I opined that it could be a 10-bagger by 2030. Both guestimates may prove highly conservative.
Much in the way Ping Identity separates itself from traditional security companies, Livongo Health is leaning on mountains of patient data and machine learning to improve the lives of its patients. Members of Livongo's platform are sent tips and nudges that not only help them stay on top of their chronic illnesses, but assist them in making lasting behavioral changes.
As of now, Livongo is almost predominantly focused on helping patients with diabetes. The company ended the first quarter with over 328,000 enrolled diabetes members, which was twice as many as it had in the year-ago period. While growth for Livongo has been phenomenal, the company hasn't even penetrated a full 1% of the 34.2 million people in the U.S. who have diabetes. Imagine how impressive Livongo will be once it has a higher diabetes penetration rate and advances its platform to include hypertension, weight management, and prediabetes.
Also, don't overlook the fact that Livongo is a telemedicine beneficiary. Since patient data can be culled by its platform and easily sent to a physician, it's making the lives of patients, doctors, and insurers significantly better.
You probably know Square best from its seller ecosystem. Square's point-of-sale devices provided to merchants have primarily targeted small and medium-sized businesses for years. But something notable has changed -- the company logged higher gross payment volume (GPV) from larger businesses than small and medium-sized businesses in the first quarter. If Square is making significant inroads with larger businesses (defined as having an annualized GPV of at least $125,000), it should have little trouble generating more fee-based revenue moving forward.
What's more, we were already seeing a move away from cash prior to the COVID-19 pandemic. With cash viewed as potentially harboring germs, it's flung open the door for cashless platform's like Square to step in.
However, the biggest catalyst for Square will almost certainly be Cash App. This peer-to-peer payment platform saw record numbers of signups in March and April, according to the company. This has come after the company has more than tripled its monthly active user count in a two-year period. With the ability to collect fees on merchants and users, as well as make a killing on bitcoin exchange, Square may one day rival the market caps of our nation's largest money-center banks.
Of course, what list is complete without Amazon (AMZN 2.09%). You may get sick and tired of hearing about Amazon all the time, but it's a fast-growing freight train that no company seems to be able to derail.
Most folks know Amazon best for its e-commerce marketplace. According to Bank of America, Amazon controls 44% of all online sales in the United States, which is over six times higher than its next-closest competitor Walmart. Amazon has done a particularly good job of pivoting its e-commerce dominance into more than 150 million Prime memberships worldwide. The fees collected by these memberships helps Amazon in undercutting brick-and-mortar retailers on price.
Amazon has also been a major beneficiary of the COVID-19 pandemic. With consumers worried about venturing out, or perhaps required to stay home by their governor, online ordering has picked up big time.
But it's not e-commerce that's going to be Amazon's long-term growth driver -- rather, its infrastructure cloud segment, Amazon Web Services (AWS), will do most of the heavy lifting. AWS is growing at roughly twice the rate of Amazon's core operations, and the margins associated with it are considerably higher. Thus, as AWS grows into a larger percentage of total sales, Amazon will see a big uptick in operating cash flow.
According to Wall Street, Amazon's operating cash flow per share is expected to skyrocket from $76 in 2019 to over $201 by 2023.