We've witnessed some wild years on Wall Street, but arguably none has been crazier than 2020. During the first quarter, we watched the widely followed S&P 500 lose more than a third of its value in just over a month, then regain everything that was lost in less than five months. Roller-coaster rides like these don't happen often, and only reinforce the idea that trying to predict short-term market movements with any accuracy is impossible.
However, heightened volatility in the stock market has historically been a great time for investors to put their money to work. After all, every single stock market correction in history has eventually been erased by a bull market rally.
Best of all, you don't need to start with a mountain of cash to build wealth on Wall Street. With most brokerages eliminating commission fees for companies listed on major U.S. exchanges, as well as removing account minimums, you can begin charting your path to financial freedom with $75.
If you have $75 you can spare, here are three great stocks to consider buying right now.
Making money is usually easy when you buy brand-name companies that provide important services to the public. That's why pharmacy chain CVS Health (NYSE:CVS) could be a great place to put $75 to work.
CVS Health is a play on the aging of America. As baby boomers age, they're more likely to rely on maintenance therapies to improve their quality of life. CVS Health's pharmacy provides much better margins than its front-end retail sales. Over the long run, CVS should see steady growth in the number of customers serviced by its pharmacy segment.
CVS Health also expanded its revenue channels with the 2018 acquisition of health benefits provider Aetna. We typically don't think of insurance companies as fast-growing; however, adding Aetna into the fold should increase CVS' organic growth rate and operating margins, which are often dragged down by front-end retail sales. The combination is expected to result in significant cost savings. It should also encourage Aetna's millions of members to stay within the CVS Health network.
Further, CVS Health should be able to drive additional foot traffic to its stores by opening some 1,500 HealthHUB health clinics. These on-site clinics will help patients with chronic illnesses. If CVS successfully courts these folks at the local level, its forward price-to-earnings ratio of close to 8 will be a bargain.
If growth stocks are more your thing, putting $75 to work in social media up-and-comer Pinterest (NYSE:PINS) could be a smart move.
Most social media companies aside from Facebook have hit a user growth wall at some point, but not Pinterest. Between June 2019 and June 2020, Pinterest gained 116 million monthly active users, with the lion's share of these gains derived from international markets (106 million of the 116 million MAUs). Though the average revenue per user in international markets is only a fraction of what the company generates from U.S. customers, this also gives Pinterest the opportunity to grow international ARPU many times over in years to come.
Pinterest's tie-ins to e-commerce are arguably its most attractive feature. With its MAUs willingly posting about the products, places, and services that interest them, it makes perfect sense for Pinterest to connect these users with small businesses that cater to their needs. In other words, Pinterest users are highly motivated consumers. Pinterest is simply the bridge platform to get these already motivated consumers to make a purchase.
Having already partnered with cloud-based e-commerce platform Shopify and increased its usage of video to improve user engagement, Pinterest seems well on its way to doubling its sales every four or five years.
Another great stock to invest $75 in right now is U.S. vertically integrated multistate operator Cresco Labs (OTC:CRLBF).
That jumble of words means that Cresco Labs is a marijuana stock that cultivates, processes, and sells its cannabis in a number of legalized states. By controlling the seed-to-sale process, Cresco ensures the quality of its product and keeps its production costs down. The way I see it, there are two key catalysts that should push Cresco's valuation higher over the long run.
First, Cresco Labs has a burgeoning retail presence. Although the company only holds 29 retail licenses, nearly half of its 19 operational dispensaries are located in Illinois. As some of you may recall, Illinois was the first state to legalize the consumption and sale of recreational cannabis at the legislative level. With the Land of Lincoln being a limited-license state, Cresco Labs' nine operational dispensaries have a good chance of scooping up significant market share in a state capable of more than $1 billion in annual sales by 2024.
Second, Cresco should make waves with its purchase of Origin House, which closed in January 2020. Origin House was one of a select few companies to hold a cannabis distribution license in California. That's key because California is the most important marijuana market in the world by annual sales. With Origin House an owned entity, Cresco Labs can place its products into more than 575 dispensaries throughout the Golden State.
Look for Cresco Labs to be one of the fastest-growing pot stocks over the next five years.