By now, you've already heard tales of the wild gains and face-melting losses that some traders and short-sellers have experienced during the recent GameStop (GME -3.74%) mania. And it would be no surprise if watching it all unfold left you feeling tempted to pick up a few shares -- I know I was. But participating in speculative trading isn't the path to sustainable portfolio growth, nor will it help you become a better investor.
As hard as it may be to stay on the sidelines amid these sorts of surges, the good news is that there are other and better (not to mention much less terrifying) places to invest your money. Consider, for example, these three companies that are growing their revenues more rapidly than GameStop, and have superior long-term prospects to it.
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX -1.56%) has the potential to be a better long-term stock holding than GameStop because it is the company when it comes to treating cystic fibrosis. Vertex's quarterly revenue is growing at a blistering 62% year-over-year pace, and its quarterly earnings are growing by more than 1,000%. Plus, its sales revenue is highly recurring. Cystic fibrosis is a lifelong condition that needs persistent and regular treatment. The company has little in the way of debt, more than $6 billion in cash, and, most importantly of all, a dominant position in its market.
While there are only around 80,000 cystic fibrosis patients worldwide, Vertex has spent years fostering ties with the community. So, it understands its customers' needs comprehensively, and it can explore new therapy projects -- or the repurposing of older ones -- that it can expect to have a ready-made market. Earlier this week, regulators accepted the company's application for an expanded indication of its triple-drug combination treatment Trikafta, so that it could be prescribed to an additional population of about 1,500 pediatric cystic fibrosis patients. The revenue impact of that particular approval may be small, but Vertex is always working to penetrate its market even more comprehensively, and it is showing no signs of slowing down.
2. Guardant Health
Guardant Health (GH 1.28%) makes cutting-edge cancer diagnostics that help clinicians pick the right treatments for their patients. Its Guardant360 CDx liquid biopsy is already approved by the U.S. Food and Drug Administration (FDA), and the company is just at the start of its efforts to capitalize on the $6 billion market for liquid biopsy diagnostics in the U.S. It's also working on a new product that sequences the genomes of solid tumors more effectively than currently available technologies, and it also has a soon-to-be-launched test that monitors patients for cancer recurrence.
Guardant's finances are quite sound in part because it makes products that patients can massively benefit from. While it isn't profitable yet, it has only $47.12 million in debt compared to its $1.01 billion in cash and trailing revenues of $271.31 million. Its quarterly revenues are growing at a rate of more than 22% year over year, reflecting rising demand for its core products. Expect this stock to rise steadily as the company's diagnostics become even more sophisticated and earn wider use.
If healthcare stocks aren't your thing, consider tech behemoth Apple (AAPL -1.13%). With the help of its powerful brand and a global reach, its trailing revenues exceeded $294 billion over the last 12 months, and the company has enjoyed consistent profitability. Plus, the stock has a handful of catalysts each year that can propel it higher, among them the debuts of new products and updates to established favorites. That means there are a few regularly scheduled opportunities that would facilitate buying or selling the stock at a premium.
In Apple's latest earnings report, its chief financial officer remarked on "double-digit growth in each product category, which drove all-time revenue records in each of our geographic segments and an all-time high for our installed base of active devices." That's probably not a quote you'd hear from the CFO of a company in dire financial straits. In the recent quarter ended Dec. 26, Apple celebrated record sales of $111.4 billion and record earnings per share (EPS) of $1.68 -- handily beating analyst expectations.
Investors can count on the fact that Apple will be around for a long time. It's unlikely to experience any of the massive surges or contractions of value that have defined GameStop in recent days, but I'd bet on it continuing to grow steadily over the long run.