Some investors could be tempted to head for the hills because the stock market's recent volatility doesn't provide a nice warm-and-fuzzy feeling. It's quite possible that the number of COVID-19 cases -- the main underlying reason behind that volatility -- will get worse before they get better.
However, smart investors understand that the market gyrations we're seeing often present great buying opportunities. You don't even need a huge upfront amount to get started. The key is to buy the right stocks, but which ones look attractive? I think that investing $1,000 in these three stocks would be a brilliant move right now.
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1. Curaleaf Holdings
Several industries have experienced impressive growth since the COVID-19 pandemic began. You might be surprised to learn that the U.S. cannabis industry is one of them. The U.S. pot market remains in its infancy, though. Curaleaf Holdings (CURLF +0.77%) ranks as the biggest multistate cannabis operator based on market cap and appears to be on track to grow even larger.
Curaleaf's revenue soared 120% in the second quarter to an all-time high. The company isn't profitable yet, but its bottom line is definitely moving in the right direction to soon reach that goal. With the company's business booming, the stock has jumped more than 35% year to date.
Even stronger growth over the near term seems like a slam dunk. Curaleaf has completed three acquisitions since the close of Q2, notably including the big buyout of Grassroots, the largest private vertically integrated multistate cannabis operator in the U.S. The company has also opened seven new retail cannabis locations across multiple states.
Curaleaf could be a huge winner on Election Day next week. Arizona and New Jersey residents vote on recreational marijuana legalization. It's also possible that a change in control of the U.S. Senate and potentially the White House could set the stage for changes to federal laws that open up even more markets and enable Curaleaf to list its shares on a major U.S. stock exchange.
If the election results go well for Curaleaf, its shares should skyrocket. Even if they don't, the company still has tremendous growth prospects.
2. The Trade Desk
The Trade Desk (TTD +2.06%) has experienced business disruption during the pandemic, as some companies reduced their advertising spending. Since the company is the leading provider of a platform for buying digital ads, this negatively impacted The Trade Desk's financial performance.
Could a worsening of the coronavirus outbreak still hurt The Trade Desk? Maybe. However, it would only be a temporary problem.
The Trade Desk CEO Jeff Green stated in August that he and his team "believe the COVID pandemic has permanently accelerated the growth of connected television, changing the TV landscape forever." He added, "And no company is better positioned to grab share in CTV than The Trade Desk."
My view is that The Trade Desk is a great investment regardless of whether or not the stock pulls back. The long-term tailwinds generated by the growth of CTV are enormous. Keep in mind that The Trade Desk stock has more than doubled so far this year despite the COVID-19 impact. I think it still has plenty of room to run.
3. Trupanion
Trupanion (TRUP +1.76%) is the fastest-growing provider of medical insurance for cats and dogs. The company's growth hasn't skipped a beat during the coronavirus outbreak. Trupanion's revenue jumped 28% year over year in Q2, with its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) more than quintupling.
Over the long run, the COVID-19 pandemic could boost Trupanion's growth prospects. How? Pet ownership has risen significantly with more Americans staying home. But even without help from the pandemic, Trupanion's opportunity looks great.
There are around 180 million cats and dogs in North America, with roughly 120 million of them visiting veterinarians each year. Only 1% of pets in the U.S. and close to 2% of pets in Canada are covered by medical insurance. By comparison, 25% of pets in the U.K. are covered by insurance. If Trupanion can approach the same level of market penetration in the U.S. that exists in the U.K., the company's addressable market would top $33 billion.
Trupanion should be in a good position to continue expanding its market share, thanks in large part to its tight relationships with veterinarians across North America. I predict that this stock will be a huge winner over the next decade.
