Investing in 2020 should really come with a disclaimer. The past six-plus months have been one of the most volatile periods on record, with the benchmark S&P 500 losing 34% of its value in less than five weeks, then regaining everything that was lost (and some) in the subsequent five months. This year has undeniably taught investors how fruitless it is to try to predict short-term market movements.
But at the same time, it's been a great year for long-term investors to buy into great companies on the cheap. With volatility picking back up over the past week and change, opportunity has come knocking yet again for long-term investors looking to buy into the market's most unstoppable stocks.
Best of all, long-term investors don't need to be rich to eventually become wealthy. If you have $2,500 that you can spare, which won't be needed to pay bills or cover emergencies, you have more than enough to buy the following four unstoppable stocks.
As you can imagine, Alphabet has been clobbered by the coronavirus disease 2019 (COVID-19) pandemic. As an ad-based business, Alphabet has seen companies of all sizes pull back on their spending, which led the company to report its first year-on-year sales decline since going public.
However, long-term investors would be smart not to read too much into this data. As a whole, GlobalStats finds that Google has accounted for between 92% and 93% of all online internet search (on a monthly basis) over the trailing year. It's the clear go-to when it comes to search ad placement, which means it'll boast considerable pricing power during the many long periods of economic expansion.
Alphabet's cloud infrastructure segment, Google Cloud, is also a stealthy fast-growing segment. It's no secret that cloud subscription margins are much higher than ad-based margins. With Google Cloud raking in over $3 billion in the second quarter and accounting for nearly 8% of Alphabet's total sales, it's going to be responsible for a significant uptick in the company's operating cash flow in the years that lie ahead.
You don't have to get cute and find the hidden gem in the social media space. Just consider buying Facebook (NASDAQ:FB), which is far and away the most unstoppable social media presence.
Like Alphabet, Facebook's business model is driven by ad revenue. But in Facebook's case, ads make up an even larger percentage of total sales. This means COVID-19 concerns and recent questions about Facebook's filtering of hate speech have adversely impacted the company's near-term results.
And yet, despite the worst quarter for the U.S. economy in decades, Facebook still logged an 11% year-on-year sales increase during the June-ended quarter. That should tell you something about how important Facebook and its family of social media assets are to the advertising world.
As of June 30, Facebook had 2.7 billion monthly users, as well as 3.14 billion family monthly active users (family accounts include owned assets Instagram and WhatsApp). There's simply nowhere else that advertisers can go where they're going to get access to at least 2.7 billion targeted eyeballs, and Facebook knows it.
Furthermore, the company has only monetized a portion of its assets. The vast majority of current sales are derived from ad revenue on Facebook and Instagram, with Facebook Messenger and WhatsApp not yet monetized in any meaningful way. When the company does monetize these platforms, as well as rolls out additional initiatives beyond Facebook Pay, we could witness sky-high sales growth from a megacap company.
As the name implies, Teladoc is a leading telemedicine company in the healthcare sector. It was already seeing a boon in businesses well before the pandemic struck. However, keeping sick and immunocompromised people out of hospitals and doctor's offices has made virtual visits that much more important. After generating $20 million in full-year sales in 2013, Teladoc might hit $1 billion this year, and top $2 billion by 2023.
Additionally, you should understand that telemedicine visits are a benefit to all parties. It puts less time constraint on physicians, provides convenience for the patient, and happens to be cheaper than in-office visits for health insurance companies. We're really just scratching the tip of the iceberg after Teladoc registered 2.8 million visits during the June-ended quarter.
Also, don't overlook Teladoc's transformative cash-and-stock merger with applied health signals company Livongo Health (NASDAQ:LVGO). Livongo gathers copious amounts of data on patients with chronic illnesses and, using artificial intelligence as an aid, sends these folks tips and nudges to incite lasting behavioral changes. What Livongo is doing is clearly working, as the company has delivered three consecutive quarterly profits and continues to double its year-over-year Diabetes member counts.
When combined, this duo will be unstoppable in the healthcare space.
It's rare when payment-processing giant Visa (NYSE:V) isn't kicking tail and taking names, but when those short periods of time do occur, it's important for long-term investors to pounce.
About the only way this freight train can be slowed down is during a recession. Visa witnessed gross dollar volume on its network decline in 2009 from the previous year, and it'll likely face that same fate in 2020 with the coronavirus pandemic briefly pushing the U.S. unemployment rate to levels not consistently seen since the 1930s. But it's going to be impossible to keep this well-oiled money machine down for long.
Working in Visa's favor is the fact that its success is tied to U.S. and global economic growth. Even though economic contractions and recessions are a natural part of the economic cycle, periods of expansion tend to last considerably longer than recessions.
Also, understand that Visa's sole purpose is to aid in the facilitation of payments. Unlike some of its competition, it's not a lender. The big advantage of staying away from lending is that it means no direct exposure to rising loan delinquencies during periods of contraction or recession. This is why Visa's gross margin is often at or above 50%.
Visa has the highest credit card market share by network purchase volume in the U.S., and more than doubles the share of its next-closest competitor. It's absolutely unstoppable in the payments space.