Whether you've been investing for a few months or a few decades, you've witnessed a number of Wall Street firsts in 2020. You've navigated your way through the quickest bear market decline of at least 30% for the broad-based S&P 500. You've also reveled in the fastest rebound to new highs from a bear market low ever. In fact, by the time the curtain closes on 2020, the benchmark index might deliver a double-digit total return.
Arguably the only constant this year has been heightened levels of volatility for the stock market. Though wild vacillations in equities can be unnerving at times, they've historically been opportunities for long-term investors to scoop up great businesses at discounts. This is especially true during periods of economic recovery, when a relatively young bull market is finding its legs.
You don't need much money to become a millionaire on Wall Street. If you have $300 at your disposal, you have more than enough to generate wealth in the stock market with the following three surefire stocks.
If you think you missed the boat on social media giant Facebook (META 1.89%), think again. There are a number of serious growth catalysts waiting in the wings to push its valuation into trillion-dollar territory.
Facebook ended September with 2.74 billion monthly active users and 3.21 billion family monthly active people. This family figure includes other owned assets, like Instagram and WhatsApp. No other social platform comes close to reaching 3 billion targeted eyeballs each month. That makes Facebook the go-to for targeted advertising. Even with the coronavirus disease 2019 (COVID-19) pandemic clobbering the U.S. economy, Facebook has still delivered steady double-digit ad growth this year.
Also, Facebook has yet to fully monetize its amazing lineup of assets. It owns four of the six most visited social platforms on the planet: Facebook, WhatsApp, Facebook Messenger, and Instagram. Only Facebook and Instagram are being fully monetized with ads. When the company finally opens the floodgates with its remaining assets, Facebook could see its annual sales double, with cash flow jumping even more impressively.
The company has other growth avenues it has yet to fully explore. For example, Facebook could take advantage of the digital payment boom, or could opt to explore a subscription-based content streaming service.
The growth story at Facebook is far from over, making it a surefire stock to own in a young bull market.
Bristol Myers Squibb
Healthcare stocks are usually safe places to park your money no matter how the U.S. economy is faring. With an economic recovery under way, the green flag is waving for pharmaceutical giant Bristol Myers Squibb (BMY 0.30%).
One of the most exciting catalysts for Bristol Myers was the acquisition of Celgene completed in November 2019. This buyout brought blockbuster multiple myeloma therapy Revlimid into the fold. Revlimid looks likely to hit $12 billion in sales this year. It continues to grow by a double-digit percentage each year. Longer duration of use, increased demand, label expansion opportunities, and higher list pricing is combining to drive this growth. Revlimid is protected from a full onslaught of generic competition until the end of January 2026, so Bristol Myers will probably ride this serious cash cow for another five years.
Bristol Myers Squibb's organically developed therapies are also delivering for its shareholders. Leading oral anticoagulant Eliquis (developed with Pfizer) generated $2.1 billion in third-quarter sales, while cancer immunotherapy Opdivo flattened out around $1.8 billion. Opdivo is particularly intriguing given its participation in dozens of ongoing clinical studies. It wouldn't be surprising to see Opdivo's label continue to expand, with peak annual sales topping $10 billion.
Bristol Myers Squibb and its single-digit forward price-to-earnings ratio make for a smart buy. Investors will likely rotate into value stocks in a young bull market.
I know what you're probably thinking. "Aren't utility stocks slow-growing and poor ways to take advantage of strong growth prospects coming out of a recession?" Typically, I'd answer yes -- but NextEra Energy isn't your traditional utility.
NextEra is generating more electric capacity from solar and wind power than any other utility. Though investments in building wind and solar farms and converting some existing utilities to renewable energy aren't cheap, the rewards are worthwhile. NextEra has been growing its operating earnings by a high single-digit compound annual rate. Further, since the company is financing these projects with debt, NextEra stands to benefit from the Federal Reserve's pledge to keep interest rates at or near record-tying lows through at least 2023.
NextEra's shareholders also enjoy exceptional transparency and predictability. The company's traditional utility operations (i.e., those not fueled by renewables) are regulated. While NextEra can't just pass along price hikes at will, the company also isn't exposed to potentially volatile wholesale pricing.
Considering how consistent consumer demand is for electricity, NextEra Energy seems like the perfect stock to own in a young bull market.