After a year of disruptions caused by the coronavirus pandemic, help is on the way for hundreds of millions of Americans. Stimulus payments of $600 each for most Americans are being delivered, and with the Democrats winning control of the Senate on Jan. 6, each relief check could potentially go up to $2,000.
On top of that, some states like California are considering a state-level stimulus of $600 per person for those below an income threshold.
It's always best to set aside enough money for immediate necessities and build up an emergency fund. But if you don't have a pressing use for the cash, consider these three top growth stocks for your stimulus money.
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1. Sea Limited
Sea Limited (SE 1.20%) is a tech-heavy holding company based in Southeast Asia. It operates an online gaming platform, an e-commerce service, and a digital financial service. During the third quarter of 2020, the company's revenue increased by nearly 100% to $1.2 billion. There was outstanding growth among all of its segments.
Its digital entertainment branch, Garena, increased its active users by 78% year over year to 572.4 million, and the number of paying users was up 124% year over year to 65.3 million. The company's e-commerce platform, Shopee, saw its gross merchandise volume increase to $9.3 billion, a 103% yearly hike. And there are more than 17.8 million paying users for the company's mobile wallet, contributing more than $2.1 billion in total payments volume.
Although the company's net loss accelerated from $175.2 million in the third quarter of 2019 to $346 million this time around, it can comfortably sustain such capital consumption; it currently has over $3.5 billion in cash and equivalents. Sea Limited is aggressively expanding to capture market share to reward its shareholders, making this tech stock a top pick.
2. HEXO
HEXO (HEXO) is a high-flying marijuana company that holds the No. 1 market share in Quebec, Canada's second-most-populous province. The company's dried cannabis and other pot products account for 29% of Quebec's sales volume. And it holds the No. 1 market share in cannabis-infused beverages for all of Canada, a segment that brings in about CA$3 million ($2.4 million) per quarter in revenue, up 54% from the prior quarter.
HEXO is doing a great job in capital management with approximately CA$150 million in cash on hand and no debt. Perhaps the most notable achievement is the company's growth. During the first quarter of 2021 (ended Oct. 31), its revenue was up by a stunning 103% year over year to CA$29.5 million. Simultaneously, the company's gross profit swung from a CA$34.7 million loss in the prior quarter to a CA$18.2 million profit in the first quarter of 2021.
Trading at just 6.3 times revenue and 1.5 times book value, HEXO is severely undervalued compared to its growth potential. If you are a fan of marijuana stocks and want to grab them at just the right price, consider HEXO now.
3. Moderna
Moderna (MRNA -1.39%) is a top coronavirus stock. In clinical testing, the company's vaccine was found to be 94% effective in preventing COVID-19 and 100% effective in protecting against severe cases of the disease. The vaccine showed no severe side effects.
Right now, the vaccine has passed regulatory clearance in the U.S., U.K., EU, and other areas. Moderna plans to scale its production to between 600 million to 1 billion doses this year. Each dose costs $10 to $50.
In addition to its COVID-19 program, Moderna also has a robust pipeline consisting of five vaccine candidates, five immuno-oncology therapeutics, four biologics targeting rare diseases, and two that treat autoimmune diseases. The company has more than enough capital to sustain its research and development efforts with its $4 billion cash balance and pending coronavirus vaccine deposits.
Even though it has a $45.9 billion market cap, it may be trading for as little as 2 to 8 times forward revenue, assuming somewhere between $5.5 billion and $7 billion in vaccine order revenue. Hence, it is definitely not too late to add this coronavirus biotech to your portfolio.
