Relief is on the way for over 140 million Americans. After more than a month of back-and-forth debates in Congress, President Joe Biden has signed a $1.9 trillion fiscal stimulus package, which comes atop the well over $3 trillion in stimulus passed by Capitol Hill last year.
Though aid comes in many forms in the newest coronavirus stimulus bill, it's the $1,400 stimulus checks to qualifying individuals that's garnering the most buzz. That's because this money will be used by many recipients to pay their rent or mortgage, buy food, or cover utility costs.
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For stimulus recipients who haven't been adversely affected by the pandemic, however, a $1,400 stimulus payout might be the perfect excuse to put this money to work in the stock market. After all, the average annual total return (including dividends) of the S&P 500 since 1980 is above 10%.
It's no secret that growth stocks have vastly outperformed value stocks since the end of the Great Recession. With lending rates at or near historic lows and the Federal Reserve pledging to stand pat on interest rates through 2023, access to cheap capital can help growth stocks soar to new heights.
If you're among those stimulus-check recipients who plan to put their payouts to work in the stock market, consider buying the following three growth stocks, all of which have the potential to triple your money.
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Sea Limited
One of the most exciting hypergrowth stocks investors can buy right now is Singapore-based Sea Limited (SE +2.51%). Sea aims to revolutionize e-commerce and financial services in Southeastern Asia.
The company has three operating segments, all of which are growing at a lightning-fast pace. Gaming is Sea's most profitable segment, based on positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). It ended the year with over 610 million active gaming users, 73.1 million of which were paying customers. Whereas 9.4% of its quarterly active users were paying members at the end of 2019, 12% are now contributing to Sea's top line.
The company's online platform Shopee should be an even more impressive long-term growth driver. Between the pandemic keeping consumers in their homes and the middle class blossoming in many Southeastern Asian countries, the gross merchandise value (GMV) traversing Shopee doubled to $35.4 billion in 2020, with gross orders up almost 133%. It wouldn't be the least bit surprising if GMV doubled again in 2021.
Finally, Sea's mobile-wallet segment saw payment volume hit $7.8 billion for the full year, with north of 23 million people paying for digital-wallet services. Underbanked regions of Southeastern Asia are a perfect target for mobile wallets.
Combined, these segments could allow Sea to triple its sales over the next three years.
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Jushi Holdings
There's no denying that marijuana is a big-money trend. Over the next decade, it's liable to be one of the fastest-growing industries in North America. But there's a big difference in the long-term outlook between Canadian and U.S. pot stocks. Marijuana stocks in the U.S. have a much greener outlook, which is why small-cap Jushi Holdings (JUSHF +1.90%) can triple stimulus recipients' payouts.
The great thing about Jushi is its approach to growth. This is a company that's focused on the limited license states of Pennsylvania, Illinois, and Virginia. In the latter, dispensary licenses are assigned by jurisdiction. Meanwhile, in Pennsylvania and Illinois, retail license issuance is capped.
In simpler terms, Jushi is targeting states where competition will be tempered or nonexistent in the regions in which it's chosen to operate. Since Jushi is a smaller company, this will give it the proper time to build up its brands and create a loyal following.
Jushi's executives and insiders also have a vested interest in the company's success. It's commonplace to hear insiders tout their company's prospects. It's another thing altogether when execs and insiders put up $45 million of the company's first $250 million in initial funding. When the interests of insiders align with investors, a company's valuation moves higher more often than not.
Jushi is currently one of the cheapest pot stocks relative to future sales potential, making it the most attractive cannabis stock to buy now (and my top stock to buy for March).
Image source: Redfin.
Redfin
Stimulus recipients can also confidently put their money to work in technology-focused real estate company Redfin (RDFN +0.00%), which is aiming to disrupt a stodgy industry.
It's no surprise that historically low lending rates are fueling one heck of a housing boom for Redfin. If the Fed continues to buy Treasury bonds on a monthly basis to drive down yields and sticks to its plan of keeping its federal funds rate at an historically low range of 0% to 0.25% through 2023, demand for housing should remain exceptionally strong. In 2020, Redfin's share of U.S. existing-home sales jumped 10 basis points to 1.04%.
But there's more going on with Redfin than just favorable macroeconomic factors. For example, Redfin is undercutting its competition on price by offering listing rates that range from 1% to 1.5%. That can be up to 2 percentage points lower than their competitors. With home prices soaring in the wake of historically low mortgage rates, the magnitude of these listing-fee savings has multiplied.
Furthermore, Redfin has implemented a number of services designed to ease the burden of the buying or selling process. The company's RedfinNOW service has launched in a handful of new cities and allows people to directly sell their home to Redfin for cash. The company also offers services that delegate Redfin to handle appraisals and home-inspection paperwork for buyers and sellers.
Real estate may be a relatively boring industry, but the expectation from Wall Street that Redfin will more than triple its sales by 2024 suggests otherwise.
