The stage is set for a potentially epic bull market to take shape with Joe Biden in the White House.
Volatility remains high and the U.S. economy is still finding its footing after one of the steepest recessions in decades. Still, historically low lending rates, ongoing quantitative easing measures from the Federal Reserve, and multiple rounds of fiscal stimulus from Washington could light a fire under equities. With access to cheap capital, growth stocks with clear-cut competitive advantages should face few hurdles.
If you're looking to grow your wealth by taking advantage of what could be an explosive Biden bull market, the following five stocks could be just what you need to double your money.
Let's begin with edge cloud services provider Fastly (FSLY 2.55%). This company is responsible for securely and expeditiously delivering content to end users. It's benefited nicely from businesses shifting their traffic online, a long-term trend that the pandemic accelerated. Fastly has proven to be a go-to edge cloud provider, and will continue to be as online traffic surges in the years to come.
Fastly growth from existing clients is extremely impressive. Even after TikTok parent ByteDance pulled most of its traffic off Fastly's network in the third quarter (TikTok was Fastly's biggest customer by revenue in the first-half of 2020, and was embroiled in a spat with the Trump administration during Q3), Fastly's sales jumped 42%. The bulk of this growth came from existing clients, with the company reporting a dollar-based net expansion rate of 147%.
Having existing clients spend more is Fastly's ticket to recurring profits, and should play a key role in doubling its share price.
Precision medicine should be a slam-dunk growth trend in a Biden bull market, which is why Teladoc Health (TDOC 0.05%) is such a smart stock to buy.
As the name suggests, Teladoc is a leading telehealth services company. Like Fastly, it was able to take advantage of the coronavirus disease 2019 (COVID-19) pandemic. Between April 2020 and September 2020, virtual appointments more than tripled. Telehealth will remain an important part of the U.S. healthcare system even after the pandemic ends. It's more convenient for patients and physicians, and virtual visits are billed at a lower cost than office visits for insurers.
Beyond telemedicine, Teladoc also acquired applied health signals company Livongo Health in early November. Livongo has already turned the corner to profitability, despite only securing a little over 1% of the U.S. diabetes market. Livongo offers tips and nudges to help chronically ill patients lead healthier lives. It's looking to expand this service to patients with hypertension and weight management concerns in the months and years to come. In other words, Livongo makes the fast-growing Teladoc that much better.
Cresco and most other U.S. marijuana stocks don't need any action from the Biden administration to thrive. Having states set their own cannabis guidelines has been working fine for Cresco. In fact, the company has two key catalysts driving its growth that could push total sales above $1 billion by as early as 2022.
First, Cresco has its retail operations: 20 open dispensaries, 10 of which are in Illinois. The Land of Lincoln is a limited license state that registered $1 billion in cannabis sales in its first year of recreational legalization.
Second, Cresco Labs is a wholesale marijuana kingpin in California, the most lucrative weed market in the world by annual sales. Purchasing Origin House in January 2020 gave Cresco access to the company's cannabis distribution license. Nowadays, it's able to place cannabis products into more than 575 dispensaries throughout the Golden State.
Investors should also expect cybersecurity stocks like Ping Identity (PING) to thrive in a Biden bull market.
The beauty of businesses moving online and into the cloud is that it creates a growing demand for data protection. Cybersecurity is no longer optional. No matter the size of a business or the state of the local or global economy, hackers and robots don't take time off.
One of the many companies at the heart of data protection is Ping Identity. Ping relies on artificial intelligence to help its identity verification solutions grow smarter over time. The more clients Ping lands, the more effective its identity solutions are at identifying unique threats to enterprise data.
What's more, Ping doesn't trade at 20 or 30 times sales like most cybersecurity stocks. Ping can be scooped up for about 9 times Wall Street's consensus 2021 sales, yet looks to be on track for sustainable low double-digit growth moving forward. That's growth and value wrapped up in a single stock.
A Biden bull market should be kind to innovative real estate companies, too. That's why Redfin (RDFN 2.40%) has a really good chance of doubling with Biden in the White House.
On one hand, macroeconomic factors are playing right into Redfin's hands. The Fed has every intention of keeping its federal funds target rate at or near record lows through 2023. Plus, as noted, the nation's central bank is buying government debt each month, which could further push Treasury rates down. This all points to historically low mortgage rates and a red-hot market for housing.
On the other hand, it's all about what Redfin brings to the table to differentiate itself from the competition. For example, Redfin's listing rates of 1% to 1.5% are up to 2 percentage points lower than traditional commission fees.
Additionally, this is a company that offers a number of high-margin ease-of-use services that simplify the buying process. This includes everything from Redfin simply acquiring homes from sellers for a flat fee (these homes are held as inventory and sold later), to homeowners paying Redfin to handle title, appraisal, and home inspection paperwork. It's a growth stock with serious upside still to come.