Who needs theme parks when you have the stock market? This year, the investing community has been taken on a roller-coaster ride that involved the quickest bear market decline of at least 30% in history, the most ferocious rebound from a bear market bottom on record, and multiple single-session nominal point swings in the Dow Jones Industrial Average and S&P 500 that broke records.
But when there's volatility, there's also opportunity for long-term investors to put their capital to work. The great thing about the stock market is that you don't need tons of cash to build wealth. With many brokerages eliminating minimum deposit amounts and commission fees, you can chart your path to financial independence with as little as $50.
If you have $50 you can spare for investing, I'd suggest buying into the following four smart stocks right now.
It's not often that you'll find growth and value wrapped up in one stock, but that's exactly what investors are going to get if they choose to take their $50 and purchase shares of cancer-drug developer Exelixis (EXEL -1.03%).
Exelixis' primary growth driver is a Food and Drug Administration-approved drug known as Cabometyx. It's approved to treat first-and-second-line renal cell carcinoma (RCC), as well as hepatocellular carcinoma (HCC). Given the strong pricing power and demand associated with its lead drug, these two indications should be enough to propel Cabometyx to $1 billion in annual sales by next year.
But the Exelixis growth story is about more than just Cabometyx's quest to dominate RCC and HCC. It's about innovation. Cabometyx is currently being studied in around six dozen clinical trials, some of which are being conducted in combination with other therapies. One of these studies, CheckMate 9ER, which was undertaken in combination with Bristol Myers Squibb's Opdivo, met statistical significance in treating first-line advanced RCC patients. Years from now, Cabometyx might well be capable of $2 billion-plus in annual sales.
Meanwhile, Exelixis expects to end the year with a whopping $1.5 billion to $1.6 billion in cash, giving it plenty of financial flexibility to conduct research or maybe even go shopping.
Another smart stock to consider buying with $50 right now is gold miner Yamana Gold (AUY). Gold stocks perfectly blend growth and value, with macroeconomic conditions and company-specific improvements providing the catalysts for ample upside.
On the macro level, the outlook for physical gold has arguably never been more lustrous. A record $17.05 trillion in global investment-grade debt recently sported a negative yield, and the U.S. Federal Reserve plans to keep interest rates at or near record-tying lows for years to come. This gives income investors few avenues to generate inflation-topping returns, and it makes physical gold a likely go-to as a store of value.
On a company-specific level, Yamana Gold has done an excellent job of reinvesting in its most efficient mines (Canadian Malartic), while also bringing new assets (Cerro Moro) online. Inclusive of the byproduct metals, Yamana Gold should see its gold equivalent ounce (GEO) output jump by a low double-digit percentage in 2021 to over 1 million GEO.
Higher precious metal prices and more cost-conscious spending have also allowed Yamana Gold to vastly improve its balance sheet. Over the past five years, Yamana has slashed its net debt by more than $1 billion to $619.1 million. This improved financial flexibility places the company in a great spot with gold near its decade high.
If high-growth stocks are more your thing, perhaps a vertically integrated multistate operator in the U.S. cannabis industry might be to your liking. But rather than chasing a handful of the most widely followed marijuana stocks, you might try an up-and-comer like Jushi Holdings (JUSHF 1.48%).
While Jushi has a presence in around a half-dozen legalized markets, its core focus is on Pennsylvania, Virginia, and Illinois. The company currently has a dozen open dispensaries, but holds enough licenses to eventually more than double its open retail locations. Jushi primarily targets limited-license states, ensuring that it'll be able to gobble up a healthy percentage of medical or recreational market share in a given state without much (or any) competition.
As you might expect, Jushi is growing like a weed. Earlier this week, the company reported $24.9 million in quarterly sales, ended Sept. 30, which represented 67% sales growth from the sequential quarter. Though most of its revenue growth in the coming quarters will derive from the opening of new locations, the company has reported exceptional sequential organic growth from existing locations in Illinois and Pennsylvania.
As one last selling point, Jushi's execs have been known to put up their own money during a number of previous rounds of financing. A management team with skin in the game is a big plus in the high-growth pot industry.
Investors would also be wise to take their $50 and put it to work in satellite-radio monopolist Sirius XM (SIRI -3.24%).
Sirius XM's subscription-based operating model gives it an advantage. Whereas terrestrial and online radio are predominantly driven by ad revenue, Sirius XM generates the bulk of its sales from subscriptions. Recessions tend to hit advertising revenue hard, whereas subscription-based revenue is far less likely to see much in the way of churn. While most radio operators are contending with double-digit declines in advertising revenue in 2020, Sirius XM has delivered a 4.5% increase in subscription revenue through the first nine months of the year.
Sirius XM also benefits from the relatively fixed costs associated with its satellite network. While expenses associated with music royalties and acquiring talent can vary, the company can continue to add to its subscriber base without paying higher transmission costs. In theory, with Sirius XM boasting exceptional pricing power as a legal monopoly, this business model is designed to expand its operating margins over time.
Investors in Sirius XM shouldn't look for supercharged growth. However, they can sleep easy knowing that Sirius XM is capable of generating more than $1 billion in net income each year.