Attention, warm weather lovers: Your day in the sun is nearly here. Tomorrow marks the summer solstice, and the expected rise of temperatures throughout the country over the next three months.
But the temperature isn't the only thing that's heating up. The summer months also provide plenty of opportunity for investors to pick up high-quality stocks at attractive prices.
If you have $10,000 in cash, which won't be needed to pay bills or cover emergencies, this is more than enough to buy this summer's hottest stocks.
One scorching-hot company that you'll strongly want to consider adding to your portfolio this summer is social media superstar Pinterest (PINS 2.11%).
To state the obvious, Pinterest benefited immensely from the pandemic. People stuck in their homes turned to the internet for entertainment and engagement. This meant spending more time posting about what interests them on Pinterest, as well as perusing the interests of others on the site. In total, monthly active user (MAU) growth jumped 37% in 2020, which was up from an average of 30% annual MAU growth in the three years leading up to the pandemic.
The key to Pinterest's sustainable double-digit growth is its popularity outside the United States. Even though average revenue per user (ARPU) is much higher in the U.S., the company's opportunity to double international ARPU a couple of times this decade is what'll keep its top-line growth comfortably in the double digits. Over the trailing year, through March 2021, Pinterest added 111 million net MAUs, 103 million of which derived from outside the U.S.
Additionally, Pinterest's operating platform is a dream come true for businesses. With users willingly sharing what things, places, and services interest them, merchants can effectively target their advertising. If Pinterest continues to keep its existing users engaged and grows its total MAU count, it shouldn't have any trouble becoming a force in e-commerce.
Another hot stock to add to your summer buy list is biotech stock Novavax (NVAX 1.27%), which has been vaulted into stardom by its experimental coronavirus disease 2019 (COVID-19) vaccine candidate, NVX-CoV2373.
Earlier this year Novavax unveiled the results of a large U.K. study that showed its vaccine was roughly 90% effective. This included 96.4% effectiveness against the original strain of COVID-19 and 86.3% efficacy against the prominent U.K. variant. Last week, Novavax produced markedly similar results in its U.S. trial, with NVX-CoV2373 providing 90.4% efficacy and 100% protection against moderate and severe disease.
Sounds like a slam-dunk win, right? Unfortunately, Novavax isn't filing for regulatory approval until the third quarter and has run into production delays as well. There's clear worry it could miss out on the low-hanging fruit in the most lucrative developed markets.
But here's the thing to consider: We're nowhere close to having vaccinated the global population. Novavax's COVID-19 vaccine could have a long sales runway in emerging markets, and it could prove a viable option via boosters or as a smaller player in developed markets. Its top-tier efficacy suggests it can hold its own against the likes of Pfizer and Moderna, which currently offer the most effective COVID-19 vaccines in the United States. In short, the Novavax growth story looks to be just getting started.
Green Thumb Industries
You won't find many trends hotter right now than marijuana. More than 70% of all U.S. states have waved the green flag on cannabis in some capacity, which means federal legalization simply isn't needed for this industry to thrive. That's why fast-growing marijuana stock Green Thumb Industries (GTBIF 0.52%) is such a perfect stock to buy.
Following its closing of the Liberty Compassion acquisition in Massachusetts, Green Thumb boasts a portfolio of 58 operational dispensaries and 14 manufacturing facilities spanning a dozen states. The company also holds 45 additional retail licenses, bringing its total footprint to as many as 103 retail locations.
Whereas some multi-state operators (MSO) have tried to plant their proverbial flag in as many legalized states as possible and others have focused virtually all of their attention on one market, Green Thumb has fallen right in the middle. It's one of the larger MSOs by total retail licenses, but it's been picky about the states it's chosen to operate in. For example, it aims to maximize its presence in Illinois, which is a limited-license state. Capping the number of retail licenses issued ensures Green Thumb will have an opportunity to build up its brand and customer base. It's also bought its way into tourist-dependent Nevada, which should lead the country in cannabis spending per-capita by 2024.
But the real buzz about Green Thumb is its product mix. Approximately two-thirds of the company's sales come from derivatives, such as vapes, edibles, infused beverages, and oils. These alternative consumption options are less likely to be hurt by oversupply, and they produce superior margins compared to dried cannabis flower. This is why Green Thumb has three consecutive profitable quarters under its belt.
Right up there with marijuana is anything having to do with cloud computing. That's what makes cloud-based customer relationship management (CRM) software provider salesforce.com (CRM 3.22%) such a hot stock to buy this summer.
CRM software is used by consumer-facing businesses to access and analyze customer data in real-time. It can handle simple tasks like logging and accessing customer information, is used to oversee services issues, and can offer a predictive analysis of which existing clients would be likeliest to buy a new product or service. As you can imagine, cloud-based CRM makes sense for retailers and other service-oriented industries. However, it's finding plenty of footing in sectors you might not otherwise expect, such as finance and healthcare.
Salesforce is the juggernaut that sits atop the global CRM mountain. When IDC examined global CRM revenue in the first half of 2020, it concluded that salesforce controlled almost 20% of the market. That's more than its four-closest competitors, combined. Then again, this isn't hard to believe considering the company has grown sales by a compound annual rate of 51% over the past 20 years and 29% over the last decade.
And Salesforce isn't close to slowing down. The company has a solid track record of making acquisitions to bolster its product offerings, appeal to a broader base of enterprises, and cross-sell its CRM solutions. The company's pending cash-and-stock deal to buy Slack Technologies will check all three of these boxes.
Between rapid organic growth and acquisitions, Salesforce is on track to grow its annual revenue from $21.3 billion to north of $50 billion in five years.