It's happening again. Reddit retail investors are continuing to supercharge market mayhem over AMC Entertainment Holdings (AMC -1.45%). AMC's business has been beaten down by the pandemic and is struggling to stay financially afloat, but retail traders motivated by meme-stock mania have driven shares of the company up by nearly 1,760% over the past six months alone. And despite the fact that AMC's leadership has made multiple bids in recent months to issue new rounds of shares in the hopes of pumping life into the company's flailing financials, retail investors have consistently put a stop to these efforts.
The end result? At this point, who can say? AMC may recover from pandemic headwinds in time. But at the moment, its artificially high stock price is just that -- and retail investors continue to muzzle management to the point that the company's prospects as a viable long-term investment seem to be fading fast.
Long-term investors shouldn't buy stocks based on hype, but should instead focus on high-quality companies with strong competitive advantages that can drive consistent, durable growth. If you've been tempted to buy into the AMC hype, here are three better stocks to consider that can enrich your portfolio for years to come.
1. Innovative Industrial Properties
When it comes to investing in marijuana stocks, not all investments are created equal. Few pot stocks offer the combination of growth, long-term value, portfolio returns, and profitability that Innovative Industrial Properties (IIPR -0.57%) does.
Innovative Industrial Properties is a real estate investment trust (REIT) that only leases its properties to licensed medical marijuana growers. Its properties span the continental U.S., from Arizona to Colorado to Florida to Massachusetts, and the company regularly adds to its portfolio.
The company pays an impressive dividend, which it consistently increases. Its yield is 2.7% at the time of this writing, and on June 15, management announced a 6% boost to the company's quarterly payout.
In 2020, Innovative Industrial Properties reported that its total revenue grew 162% and its net income increased even more, up 191% from the previous year.
During the first quarter of 2021, the company's revenue and net income grew by respective rates of 103% and 122% year over year, and its adjusted funds from operations (AFFO) spiked by a total of 116%. The company also made several new property acquisitions in the early part of 2021, all while maintaining zero debt (not counting $143.8 million in exchangeable senior notes) and growing its position in cash, cash equivalents, and short-term investments to $661.4 million.
Shares of Innovative Industrial Properties continue to trend upward. The stock has gained a robust 17% since the beginning of the year and is trading about 133% higher than just 12 months ago.
Innovative Industrial Properties has plenty of growth left to explore as it expands its national footprint within the United States' multi-billion-dollar medical-use cannabis industry. It's safe to stay that the company is far from exhausting its upside potential, and now looks like a great time for investors to jump on this compelling pot stock.
Amazon (AMZN 0.68%) is the type of stock investors can keep returning to for long-term portfolio growth and value.
From its thriving e-commerce business to its cloud computing giant Amazon Web Services (AWS) to Prime Video, Amazon's ever-expanding footprint across a broad spectrum of highly lucrative industries continues to generate high levels of balance-sheet growth and more wins for its shareholders.
For a company that has decades of double- to triple-digit revenue increases under its belt, the first quarter of 2021 was just another one of many remarkable periods of growth. During the three-month period, Amazon's net sales rose by double digits (44%) and its net income surged by 224%.
Amazon's shopping ecosystem certainly hasn't slowed any despite increased competition in the global e-commerce space. As of the first quarter, Amazon Prime had grown its global membership base beyond the 200 million mark. The company also opened several new Amazon Fresh stores during the three-month period.
The first quarter also marked the debut of several new products in Amazon's devices and services ecosystem, including "the next generation of Echo Buds," the Ring Video Doorbell Pro 2, and the Ring Floodlight Cam Wired Pro.
Meanwhile, AWS is increasingly accounting for more and more of the company's overall growth, and it rakes in tens of billions of dollars in sales each year. In the first quarter alone, AWS's revenue increased 32% on a year-over-year basis.
As the behemoth that is Amazon continues to follow an explosive growth trajectory, so has its share price. Shares of Amazon have shot up by more than 400% over the past five years alone, and the stock is trading up 17% so far this year.
In any market environment, Amazon has shown time and time again that its highly diversified business model is ready to meet whatever challenges are thrown its way. Amazon is an investment that can truly stand the test of time and continue to build wealth for shareholders in both bull and bear markets.
3. Monster Beverage
Consumer discretionary stocks have delivered mixed performance during the coronavirus pandemic, but Monster Beverage has demonstrated its resilience and the strength of its brand authority since the crisis began.
In 2020, management said the company's net sales increased by a healthy 9.5% while it achieved a gross margin of 59.2% during the 12-month period. And the company grew its bottom line by more than 27% from 2019.
In the first quarter of 2021, not only did Monster Beverage grow its net sales by a mouthwatering 17%, but its net income jumped 13%. The company also delivered consistent year-over-year growth across its three key reporting segments: Monster Energy drinks (18%); strategic brands (5%), which includes a range of products such as its "affordable energy brands"; and other (12%), which features a selection of products from its American Fruits and Flavors business.
Monster Beverage is in a great position in terms of its available liquidity. At the end of the first quarter, the company reported $6.5 billion in total assets ($1.2 billion of which are cash and cash equivalents) and about $789 million in total current liabilities.
Shares of Monster Beverage have gained 30% over the past year alone, but the stock still trades for less than $100. If you're searching for a resilient stock that can deliver an attractive mix of share-price and balance-sheet growth, Monster Beverage passes both benchmarks with flying colors.