If the past 17 months have taught investors anything, it's that patience always pays off when you're invested in high-quality companies. Despite the coronavirus pandemic causing the widely followed S&P 500 to lose more than a third of its value in about a month during the first quarter of 2020, patient investors have been rewarded with a greater than 90% bounce in the benchmark index from its bear-market lows.
The greatest thing about putting money to work in the stock market is that you don't need to start with a lot to begin building wealth. With many brokerages eliminating commission fees and minimum account deposits, $100 is more than enough to begin charting your course to financial freedom.
As we move headlong into the second half of 2021, here are some of the smartest stocks you can buy right now with $100.
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Redfin
One of the smartest stocks you can buy with that "Benjamin" in your wallet is technology-driven real estate company Redfin (RDFN 0.57%). Although Redfin has been an obvious beneficiary of historically low mortgage rates, there's much more to this story than simply mortgage rates helping out real estate companies.
One of the biggest differences you'll notice between Redfin and more traditional real estate companies is the cost to put Redfin agents to work. Whereas typical real estate companies charge listing fees or commissions of up to 3%, Redfin charges only 1% or 1.5%, depending on how much business a buyer or seller has done with the company. Since historically low mortgage rates have driven up demand for new home purchases, as well as the prices for those homes, the amount of money Redfin is saving buyers and sellers is growing with each passing week.
Personalization is also at the heart of what Redfin does. It offers its Concierge service, which aids sellers with improvements and staging that'll maximize the selling value of a home. Concierge can cost up to 2.5% the value of a home's selling price. The company also offers its RedfinNow buying service in a growing number of markets. RedfinNow buys homes for cash, which removes the hassles of showing your home to prospective buyers and haggling on price.
The data is pretty clear that prospective buyers and sellers are finding value with the service. Between the end of 2015 and the end of March 2021, Redfin's share of U.S. existing home sales catapulted from 0.44% to 1.14%. There's a lot of room to expand this share, but at the same time it clearly shows that the arrow is pointing up.
Redfin isn't profitable yet, but it's on track to nearly quadruple its top line between 2020 and 2024. If it keeps this pace of growth up, it'll be rolling in the dough in no time.
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Cresco Labs
The U.S. cannabis industry opened the year on a blazing-hot streak, but has since cooled off. That retracement is your opportunity to put $100 to work in one of the smartest stocks in the pot industry, Cresco Labs (CRLBF -4.11%).
While global weed sales are rising, the important thing to note is that the U.S. is the epicenter of cannabis growth. According to New Frontier Data, U.S. pot sales are expected to grow by an annual average of 21% through 2025, ultimately reaching $41.5 billion. No other cannabis markets are even close. And with 36 states having legalized cannabis in some capacity, U.S. marijuana stocks are the smart way to invest in this high-growth space.
Like most U.S. multistate operators, Cresco Labs has a burgeoning retail presence. The company opened its 33rd dispensary earlier this month, and it'll add another four when its Cultivate acquisition closes. Taking into account the retail licenses it also holds, Cresco could have around four dozen retail locations at some point in the future.
Although Cresco's retail locations are found in some high-dollar markets, what's truly interesting is how it's targeting a number of limited-license states. For instance, Illinois purposely caps the number of retail licenses it'll issue. By operating in these limited-license states, Cresco is ensuring that its competition will be somewhat limited, and that it'll be able to successfully build its brand.
But what makes Cresco Labs truly special are its mammoth wholesale operations. Wall Street typically discounts wholesale cannabis because it produces lower margins than retail marijuana. However, Cresco's secret sauce is that it makes up for lower margins with insane volume. It holds one of only a few cannabis distribution licenses in California, which allows it to place third-party and proprietary pot products into more than 575 dispensaries throughout the Golden State. Because of wholesale, Cresco could be the biggest bargain among marijuana stocks.
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Exelixis
Lastly, biotech stock Exelixis (EXEL -1.66%) has the look of an extremely smart buy following the pounding it took earlier this week.
On Monday, Exelixis and development partner Ipsen released data from the COSMIC-312 ongoing phase 3 trial involving the combination of Cabometyx and Tecentriq for patients with treatment-naïve hepatocellular carcinoma (HCC). While the combination treatment led to a statistically significant 37% reduction in the risk of disease progression or death, it's unlikely it'll lead to a statistically significant improvement in overall survival. That wouldn't preclude this combination from being approved to treat first-line HCC, but it may not make it a compelling treatment option without a clear survival benefit.
Though I'm not going to spin COSMIC-312 as good news, it's nowhere near as bad as it sounds. Cabometyx remains a core therapy in treating advanced HCC, and is a force to be reckoned with in first- and second-line renal cell carcinoma. These existing indications will allow Exelixis's lead drug to surpass $1 billion in recurring annual sales.
What's more, Exelixis has close to six dozen ongoing clinical trials involving Cabometyx as a monotherapy or combination treatment. Not all of these studies are going to succeed. But if even a handful succeed, such as the CheckMate-9ER study, Cabometyx's label will expand and demand will rise.
Investors will also note that Exelixis is swimming in cash. The company ended March with $1.6 billion in cash, cash equivalents, and investments. That's nearly 30% of the company's market cap, relative to where it closed on June 28. Exelixis's cash gives it plenty of capital to fund its internal research engine, and it might even allow the company to go shopping for other assets.
