Tomorrow, Jan. 20, change comes to Washington. Following the vote of the American people in early November, Democrat Joe Biden will be inaugurated as the 46th President of the United States.
Last week, Biden laid out his American Rescue Plan -- a $1.9 trillion economic aid package designed to help those struggling from the unprecedented coronavirus disease 2019 (COVID-19) pandemic. Biden's plan includes a $400 weekly increase to federal unemployment benefits through September, $350 billion in assistance to state and local governments, and tens of billions in added funds for COVID-19 vaccine distribution, research, and testing.
But the headline figure of the American Rescue Plan is a $1,400 stimulus check for eligible Americans. This comes atop the $600 stimulus payout that was approved in December, bringing the total payout from both bills to $2,000 per eligible person.
For some folks, $1,400 in stimulus money will be used to pay rent, mortgages, utility bills, or put food on the table. But for others who have a sizable emergency fund and haven't been adversely impacted by COVID-19, a $1,400 stimulus check might be best put to use in the stock market. After all, historical data shows that the broader market doubles in value about once a decade.
If you fall into the latter group, there are three supercharged stocks you can buy right now that have the potential to double your $1,400 stimulus check in far less than a decade.
First up is social media company Pinterest (NYSE:PINS), which has shown no ill effects from the COVID-19 pandemic. With consumers stuck in their homes, Pinterest has seen its monthly active user (MAU) growth accelerate. Between 2017 and 2019, it averaged a 30% year-over-year increase in MAUs. As of the September-ended quarter, Pinterest had year-over-year MAU growth of 37% to 442 million.
What's interesting is that most of this user growth is coming from international markets. The bad news is that average revenue per user (ARPU) is considerably lower internationally ($0.21 in Q3 2020) than it is in the U.S. ($3.85 in Q3 2020). But on the bright side, the company's fastest growth is derived from ad revenue in overseas markets. Pinterest more than doubled its international ARPU in 2019, and in 2020, one of the most challenging years in decades, it's delivered 76%, 21%, and 66%, respective international ARPU growth through three quarters.
Pinterest also has the potential to grow into a desired e-commerce destination. Since its users are willingly sharing the things, services, and places that interest them, Pinterest merely needs to act as the medium to connect these motivated consumers with small businesses that cater to their interests. Pinterest has been leaning on increased video usage to encourage user engagement and partnered with cloud-based e-commerce platform Shopify in May 2020 to aid small businesses in their quest to capture users.
Pinterest reported $1.1 billion in sales in 2019, and Wall Street believes the company could top $4 billion in revenue by 2023. A $1,400 bet on Pinterest could go a long way for patient investors.
Another stock that offers supercharged growth potential is Vertex Pharmaceuticals (NASDAQ:VRTX).
Drug stocks are naturally defensive and are therefore a good place to put your money to work when things are volatile. Since we don't get to choose when we get sick or what ailment(s) we develop, drug developers often see steady or growing demand for their products over time.
What makes Vertex so special is the company's incredible success in treating patients with cystic fibrosis (CF). This genetic disease doesn't have a cure, but its patients have a brighter outlook because of Vertex's gene-specific treatments.
Vertex's latest CF therapy is Trikafta, a three-drug combination therapy that was approved by the U.S. Food and Drug Administration five months ahead of its review date. In a late-stage study, Trikafta improved percentage of predicted forced expiratory volume in select CF patients by 3.7 percentage points.
Usually, it takes a good year, if not longer, for new treatments to hit $1 billion in annual sales. For Trikafta, it only took a few months. Wall Street pegged Trikafta for $6 billion in peak annual sales, but that might prove conservative given its rapid initial uptake.
Furthermore, Vertex Pharmaceuticals has six other experimental treatments (non-CF) currently in clinical trials. Considering the company's track record of success in CF, it's a good bet that at least some of these other studies will yield positive results.
With sales on track to more than double between 2019 and 2023, Vertex should be on growth investors' buy lists.
A third company that offers folks an opportunity to double their $1,400 stimulus check is cybersecurity-specialist Okta (NASDAQ:OKTA).
The beauty of cybersecurity is that it becomes more essential as a service with each passing year. No matter how big or small a business, or how well or poorly the economy is performing, hackers and robots don't take a day off. If businesses have an online or cloud presence, they need protection. This practically guarantees steady double-digit growth for innovative cybersecurity companies throughout the decade.
What allows Okta to stand out is the company's cloud-native identity verification platform. Being built in the cloud, Okta's solutions rely on artificial intelligence (AI) to grow smarter at identifying threats over time. The interesting thing about cloud-native applications is that they're usually cheaper than on-premises security options and more efficient at recognizing threats, thanks to their reliance on AI.
Furthermore, Okta offers a suite of subscription services and not a one-size-fits-all package. Okta's game plan is to get businesses hooked on its initial identity verification solutions, then upsell additional products over time as its clients grow. These additional sales are where Okta will generate its juiciest margins. And might I add, it certainly doesn't hurt when nearly all of the company's revenue is derived from highly predictable and readily transparent subscriptions.
With Okta only beginning to stretch its legs, it wouldn't be surprising to see sales quadruple over the next four years.