A straightforward way of making money in the stock market is to load up on companies when they are trending up and sell them quickly when their results disappoint. Such a short-term strategy is so simple to the point that it leads to skepticism. Indeed, investing guru Warren Buffett once said: "Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well."
The investors who placed their bets on these three trendy companies over the past year and held them, however, doubled or quadrupled their money. Today, let us look at why a payment solutions provider, a cloud network business, and a coronavirus vaccine developer are among the best trendy stocks for investors to buy now.
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1. Square
Square's (SQ 0.78%) bottom line has been on a tear this year, as the payment solutions provider saw record demand from small businesses for its point of sale (POS), e-commerce, and invoice services. There are now 37 million customers using the company's Cash App and Cash Card per month. At the same time, Square's Q2 2020 revenue increased 64% year over year to $1.92 billion. Over 25% of the company's $22.8 billion in gross payment volume is now online, up from 14% in Q2 2019.
Square's business model does not end with payment solutions. During Q2 2020, the company also loaned up to $873 million to small businesses as part of the Paycheck Protection Program, up from $567 million in funding provided in Q2 2019. Square is well capitalized with $2.68 billion in cash and investments compared with $1.78 billion in long-term debt.
The stock has more than doubled investors' money over the past year, returning over 171%. Square will release financial results for Q3 2020 on Nov. 5.
2. Fastly
Fastly (FSLY 21.83%) is a rising star in the cloud computing sector for its ability to supply clients with a latency (lag)-free platform and in real time, a process known as edge computing. In its preliminary Q3 2020 results, the company reported that it expects to generate up to $71 million in revenue, a substantial increase from the $50 million it brought in during Q3 2019.
Nearly 2,000 customers are using Fastly's platform, with each business client spending an average of $761,000 and increasing spending by 37% year over year.
That's not all. Fastly now operates in 26 countries and has the technological capacity to transmit 100 terabytes of data per second. The company is also at the break-even point despite spending over $41 million of its revenue per quarter on sales and research for customer acquisition.
Fastly stock is up 268% since Jan.1. The company will report its full Q3 2020 earnings today, Oct. 28. There are good reasons to get into the stock as soon as its earnings are public information.
3. Moderna
Right now, Moderna (MRNA 0.53%) is in the final leg of the coronavirus vaccine race. The clinical stage biotech company completed the enrollment of its experimental vaccine's phase 3 trials on Oct. 22. To date, 25,560 out of 30,000 participants received second doses of its vaccine candidate, mRNA-1273. It is already under regulatory review for approval in Canada and is eligible for approval in the European Union.
The company expects mRNA-1273 to be at least 60% effective in its phase 3 trial after the candidate immunized all participants against SARS-CoV-2 in a small-scale phase 1 study. By the end of next year, the company expects to produce up to 1 billion doses of mRNA-1273 if successful.
Moderna is fully funded for its vaccine research, possessing more than $3.1 billion worth of cash and investments. Aside from its coronavirus pipeline, the company is also developing a potential cytomegalovirus (CMV) vaccine that could generate between $2 billion to $5 billion in peak annual sales if approved. The candidate is expected to enter phase 3 studies by 2021.
Overall, Moderna remains a top biotech pick for the abundance of vaccine candidates in its portfolio. Since last October, the company's stock is up over 310%. Moderna will provide an update on its coronavirus vaccine research and development (R&D) efforts during its Q3 2020 earnings call on Oct. 29.
