Businesses that are disrupting their industries represent unique opportunities for investors, even if at times the ride can be bumpy and a little scary. The mark of a great company, though, is one that powers through adversity and maintains its focus on its mission.
The three stocks below are all in the process of upending traditional ways people view their industries and all have come through the most recent crisis stronger than before. There's good reason to believe each will make investors a fortune in the years to come.
Beyond Meat: Changing how we think about meat
There are forces at play in the protein processing industry that made it ripe for innovation, and Beyond Meat (BYND 2.79%) aims to capitalize on them. The three that should pay off big in the coming years are new products, new outlets for distribution, and new markets leading to increased scale of production.
Not just content to target the beef market, Beyond Meat is looking at all areas of protein substitution, including pork and chicken, allowing it to enter new partnerships beyond just burger chains and the beef section of the supermarket. Running tests with McDonald's (MCD 0.14%) and Yum! Brands (YUM -1.01%) KFC chain opens it up to new customers.
Beyond Meat is also going beyond the borders of the U.S. into international markets. It entered China earlier this year. Look for new countries to be added to the roster, and as its production capabilities grow, it will be able to do so at scale, which should lower costs and prices, making Beyond Meat's protein substitutes more attractive to a wider audience.
Investors shouldn't ignore the risks of increased competition and a relatively finite market of consumers looking for plant-based protein alternatives, but it's still a large field that should allow for plenty of growth. It's a pricey stock, but one that can grow into its valuation.
DraftKings: Bet on this one for mass market potential
A leader in fantasy sports and online betting and sports wagering, DraftKings (DKNG -2.02%) has enormous opportunities for growth.
There are two dozen states that currently allow sports betting, and about 18 more that have proposed legislation legalizing it. Numerous states also allow some form of online gambling, whether it's casino games or poker, but only a handful have authorized all three. Those are the states realizing the greatest returns, and DraftKings and FanDuel dominate the scene.
Nationally, FanDuel has a 40% share to DraftKings 35% share, but in individual states, one or the other is typically the leader. New Jersey has become the sports-betting capital of the country, and the two rivals own 80% of the market.
With more than half the states still offering the potential for further growth, plus the addition of casino games and poker, DraftKings' run higher since its merger with a special-purpose acquisition company (SPAC) earlier this year is nowhere near complete.
Shopify: Ringing up new opportunities
2020 was Shopify's (SHOP 3.03%) time to shine. The pandemic showed that e-commerce is the future of retail, and those businesses that didn't have online capabilities, or had neglected them, fell far behind the competition and lost customers.
It was Shopify that served as the backbone of their operations, with year-to-date revenue rocketing 81% higher to hit nearly $2 billion as more merchants began using its platform this year.
eMarketer says e-commerce sales are up over 32% year to date -- far more than the 18% growth it predicted after the second quarter. Although most of those sales are dominated by the retail giants like Amazon.com, Walmart, and Target, small and medium-sized companies are seeing their businesses swell, too.
eMarketer now forecasts e-commerce sales will grow to account for 14.4% of all U.S. retail spending in 2020 and reach nearly 20% by 2024 -- growth that Shopify will be tapping into in the years ahead.