Though the stock market offers few certainties, no investment vehicle has delivered a more consistent return over the long run than stocks. Bonds and commodities may have their time in the spotlight, but they all significantly lag the stock market in average annual return over the very long term.
However, the stock market's supremacy as one of the world's greatest wealth creators has been called into question in recent years by cryptocurrencies. In a little over a decade, the world's largest digital currency, Bitcoin, has rocketed from around $1 per token to as high as $64,000.
But it's not Bitcoin that has retail investors fascinated in 2021. Rather, it's the so-called "people's currency," Dogecoin (DOGE 2.88%).
Dogecoin is unimpressive in a variety of ways
The buzz surrounding Dogecoin has to do with a combination of its insane momentum (it gained as much as 27,000% on a trailing six-month basis), growing support from Tesla CEO Elon Musk, and the perception that it's being adopted on a regular basis in the real world. Unfortunately, if prospective investors were to do any digging, they'd find that the claims made by Dogecoin bulls are often exaggerated or fail to tell the full story.
Working backwards, Dogecoin has very little real-world use. Online business-directory Cryptwerk lists approximately 1,400 businesses worldwide that accept Dogecoin as payment. Keep in mind that it's taken eight years simply to reach this really low figure.
To boot, Dogecoin's blockchain isn't handling all that many transactions on a daily basis. Data from BitInfoCharts.com shows that roughly 50,000 transactions occur each day on its blockchain. For comparative purposes, payment-processing kingpins Visa and Mastercard handled a combined 700 million payments daily in 2018, according to the Nilson report. It would take close to four decades for Dogecoin to do what these payment giants do daily.
The hype surrounding Elon Musk also lacks substance. Tweeting about Dogecoin has no tangible impact on blockchain performance and shouldn't send its market value soaring 30%. What it does demonstrate is that Dogecoin's investors are driven purely by hype and, in many instances, misinformation.
From its transaction fees and settlement times to its virtual lack of real-world use, Dogecoin is wholly unimpressive and a direct representation of what a pump-and-dump scheme looks like.
These stocks could be headed to the moon
If you want to watch an investment of yours "go to the moon," Dogecoin isn't where you want to put your money to work. Instead, you should focus on stocks with tangible long-term growth potential. The following trio of growth stocks all look ready to blast off and head significantly higher.
If you want a high-growth stock with a genuine chance to shoot higher, consider buying telemedicine-giant Teladoc Health (TDOC 0.05%). Shares of the company are up tenfold in five years, and I believe they could jump another tenfold before the decade is over.
As you can probably imagine, Teladoc was one of the biggest direct beneficiaries of the coronavirus pandemic. Physicians did everything possible to keep high-risk patients and those who might potentially be infected out of their offices. This meant turning to virtual platforms. In 2020, Teladoc handled 10.59 million virtual visits, which more than doubled the 4.14 million it handled in the previous year.
But you should understand that this is far more than a pandemic play. Annual revenue growth for Teladoc averaged 74% in the six years preceding the pandemic. This isn't a fluke -- it's a clear sign that telehealth is adding value to the healthcare-treatment chain.
Virtual visits are considerably more convenient for patients and allow physicians to better keep up with chronically ill patients. The latter can result in improved patient outcomes, which health insurers are bound to appreciate. It also doesn't hurt that virtual visits are billed at a lower rate than office visits.
Aside from this push to greater telehealth usage, Teladoc further differentiated itself by acquiring Livongo Health in the fourth quarter. Livongo is a leading applied health signals company that uses artificial intelligence to send tips to its chronically ill members to help them lead healthier lives. It was profitable prior to being acquired by Teladoc and has since grown its chronic member count to almost 660,000.
With the addition of Livongo, Teladoc Health might be the most innovative precision-medicine company in the entire healthcare sector.
To tackle the obvious question, U.S. MSOs may be nominally pricier than Canadian pot stocks, but there's good reason for that. The U.S. weed market is expected to grow by 21% annually through mid-decade, ultimately hitting $41.5 billion in annual sales by 2025, per New Frontier Data. Meanwhile, Canada has been bogged down by regulatory issues and pot stock overzealousness. Countrywide sales for our northerly neighbor could be an eighth the size of the U.S. market by mid-decade.
With that out of the way, we can focus on what makes Jushi so unique: its three-state focus. Most of Jushi's sales are expected to come from Pennsylvania, Illinois, and Virginia. All three of these states are limited-license markets. In Pennsylvania and Illinois, only a preset number of dispensary licenses can be issued. As for Virginia, retail licenses are awarded by jurisdiction. The point is that Jushi is going to be able to build up its brand and create a loyal following without much competition.
Jushi has also been willing to pull the trigger on acquisitions to expand its reach. Since the year began, it's expanded its retail and/or cultivation presence in Pennsylvania and Virginia, and it's picked up dispensaries in California, the largest marijuana market in the world by annual sales. Jushi currently has 20 operating dispensaries but is on track to potentially finish 2021 with closer to 30 open retail stores.
Best of all, Jushi is dirt cheap by U.S. MSO standards. It's valued at roughly 2.5 times forward-year sales in an industry where most cannabis MSOs go for a multiple of five (or more) times their forward-year sales. Its moon shot is coming.
If you need any convincing that the pet industry is a smart place to put your money to work, just turn to data from the American Pet Products Association. In a 32-year stretch between 1988 and 2020, the percentage of U.S. households that owned a pet rose from 56% to 67%. Further, there hasn't been a year-over-year decline in U.S. pet expenditures dating back to at least 1994. Since cats and dogs are viewed as members of the family by virtually all pet owners, they'll spend big bucks to ensure their well-being. That's where Trupanion fits in.
For the past two decades, Trupanion has been providing health insurance for companion animals. The company ended the first quarter of 2021 with almost 944,000 enrolled pets, and many of them are on recurring monthly subscriptions. The crazy thing is that this 944,000 figure represents only around 1% of all companion animals in the United States. If closer to one-quarter of all U.S. households had pet insurance on their dog or cat, Trupanion's addressable market would be approaching $33 billion.
If you're concerned about competition in the companion-animal space, you shouldn't be. Trupanion has spent two decades forging partnerships at the clinical level. It's also the only major pet insurer with software capable of handling payment at the time of checkout. These tangible and intangible advantages should allow the company to handily surpass 1 million enrolled pets as soon as the June-ended quarter.
Companion animal health insurance is a nascent but fast-growing industry that can make investors rich.