It's been a wild two months of trading kicking off 2021. There's no reason to expect things to be any more tame in March. I think a few stocks will lead the market in the coming weeks, and I'm not afraid to name names.
LivePerson (LPSN -8.75%), Grayscale Bitcoin Trust (GBTC 1.29%), and Bumble (BMBL -0.59%) have little in common. The one trait they share is that they have the right ingredients to deliver market-besting returns this month. Let's take a closer look.
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1. LivePerson
There comes a time when a customer needs help, and LivePerson is there with high-tech online chat solutions that are typically superior to in-house options. LivePerson went through a rough patch a few years ago when it was upgrading its platform, but it's humming along nicely these days.
LivePerson put out better-than-expected financial results last week, sending the shares sharply higher on Friday. We're now four years into an impressive streak of accelerating growth.
2016: (6.8% decline)
2017: (1.8%)
2018: 14.1%
2019: 16.7%
2020: 25.7%
Results are a bit more lumpy on the bottom line, but most of its metrics are showing improvement. LivePerson's platform is sticky, and customers tend to stick around and pay more. Average revenue over the trailing 12 months for enterprise mid-market accounts, the sweet spot of LivePerson's platform, is up 35% per client over the past year.
Momentum keeps building. It sees revenue climbing 32% to 33% in the current quarter, building on its 29% year-over-year top-line surge in the fourth quarter.
2. Grayscale Bitcoin Trust
These are interesting times for investors in Bitcoin (BTC -1.82%), and a popular way to have some direct exposure in the leading cryptocurrency without buying actual tokens has never been as attractive as it is right now. Grayscale Bitcoin Trust is a trust investing solely in Bitcoin tokens, and it's no small fry, with $30.7 billion in assets under management.
Grayscale Bitcoin Trust has historically traded at a lofty premium to its cold-stored assets. When it hit the market four years ago, it was initially trading for more than double its actual crypto exposure. Times have changed. The premium has narrowed to range between 6% and 38% over the past two years.
Something unusual happened to Grayscale Bitcoin Trust as the stock market and Bitcoin took a breather last week. Grayscale was trading at an 8% premium to its net asset value a week ago. By Friday's market close, it was at a 1% discount.
There's no free lunch, and for Grayscale Bitcoin Trust, a big drag is its 2% annual fee that chisels away throughout the year to reduce the Bitcoin-per-share ratio. However, with folks paying at least 1.5% in transaction fees to buy Bitcoin and just as much (if not more) to sell, it's not a bad value proposition for those who aren't sure if they'll be holding the stake for longer than 18 months. With Bitcoin taking a breather last week and the trust trading at a discount, opportunity is taking a battering ram to knock on your door.
3. Bumble
One of this young year's more attractive IPOs is Bumble. The popular online dating app hit the market at $43 last month, nearly doubling by its second day of trading before giving back nearly half of those initial gains. You may want to swipe Bumble into your growth portfolio after you take a closer look.
Bumble isn't just another dating app. It was started by Tinder co-founder Whitney Wolfe Herd, built to give women more control by allowing only women to initiate communication. It's been the gateway to 1.7 billion "first moves" since its launch in 2014. It's the world's second-highest-grossing dating app.
Revenue rose 36% in 2019, fueled by a nearly 70% surge for its namesake platform. Bumble also owns Badoo, currently the world's fourth-highest-grossing dating app. Badoo is growing slower than Bumble, but it has a longer history and a more global reach.
Revenue growth slowed to the teens in 2020, but that's not a surprise: This is a pandemic. But Bumble is well positioned to continue gaining market share and pairing up singles as we claw our way out of the COVID-19 crisis.
