Adding $500 to These 3 Stocks Would Be a Brilliant Move

Some investors have been on a wild ride with their portfolios this year, as many technology stocks plummeted earlier this year, only to reclaim much of the lost ground. 

And that's led to some investors wondering whether they should add to some of their current holdings or look elsewhere for new investments. We asked a few Motley Fool contributors which stocks they think would be worth adding $500 (or more!) to and they came back with Fiverr International (FVRR +0.61%), Shopify (SHOP 0.07%), and Roku (ROKU +1.24%). Here's why. 

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Fiverr: Connecting the gig economy

Danny Vena (Fiverr International): One thing that has become clear in recent years is that a side hustle -- or a way to make a little money on the side -- is becoming the rule rather than the exception. Whether it's food delivery, setting up a website, or consulting about accounting issues, an increasing number of people are no longer relying solely on a traditional job. Some have made a clean break with the workforce entirely, choosing the independence that comes with self-employment.

Having the skills and desire alone, however, isn't enough to start the dough rolling in, as freelancers also need to find the businesses that require their services. That's where Fiverr International comes in.

The company is home to the world's largest digital platform that connects freelancers with the businesses that need their talents. Fiverr offers these services for as little as $5, which is how the company got its name.

The process is fairly painless. Sellers (freelancers) fill out a profile that includes a list of their specific talents and the services they offer (called gigs). These are arranged by more than 500 broad categories and eight verticals, helping businesses shop for the services they need. These verticals include graphics and design, digital marketing, writing and translation, video and animation, music and audio, programming and technology, business, and lifestyle.

Fiverr acts as the broker and the bank, securing the funds to ensure that both parties to the transaction are happy with the outcome. For its part in arranging the deal, Fiverr collects a 20% commission. Its position as matchmaker has been a rewarding one for Fiverr. In the first quarter, revenue accelerated 100% year over year, while its adjusted loss per share improved by 88%. The impressive results were driven by robust customer metrics. Active buyers on the platform increased 56% year over year and spending per buyer increased 22%.

It isn't stopping there. Late last year, the company introduced Fiverr Business, a platform geared toward the special needs of team collaboration managing projects using freelance talent. In the first quarter, Fiverr reported that buyers on the platform spent three times more, on average, and hired freelancers far more frequently as compared to its standard marketplace. 

The gig economy will only get bigger from here and Fiverr is well positioned to benefit from the trend. Additionally, with a market cap of just $9 billion, the company has much more room to grow, enabled by the powerful tailwinds of the ongoing digital transformation.

Even a small investment could eventually yield a potential windfall.

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This e-commerce enabler is just getting started

Brian Withers (Shopify): Shopify's most recent results underline why this stock has been such a big winner since it's gone public. The company's software powers the growth of e-commerce businesses large and small, enabling them to get more done with less effort. The company posted a record $1.1 billion in revenue for the quarter, up 57% year over year. What's even more impressive is it's on top of a 97% top-line gain the previous year. The table below highlights more of the impressive results from the quarter.

Data source: Shopify. QOQ = quarter over quarter. YOY = year over year.

Merchant solutions revenue is highlighted above because it's the company's largest segment, made up of merchant payment services, fulfillment, shipping, and capital. This segment grows as its customers become more successful, selling more items of more value over the platform. With this massive growth, the company is improving its gross profit at an impressive rate.

But it's not resting on its past success; it has big aspirations for additional growth. For the coming year, it's focused on three areas of investment. First is its Shopify Fulfillment Network, which enables its merchants to capitalize on quality affordable fulfillment services that are already integrated into Shopify's software. Second is the Shop App, which is centered around having a great mobile shopping experience for the customers who browse on Shopify's merchants' online stores. Lastly, international expansion is getting additional funding to provide more local support in regions outside of the U.S. and Canada.

You may feel that the stock seems expensive at a 56 price-to-sales ratio, and you wouldn't be wrong. But part of why the market pays up for the shares is that the company is well run and expected to grow long into the future. For those patient investors, investing $500 into a partial share of Shopify today will seem like a brilliant move as you look back from the year 2025.

Image source: Getty Images.

This stock has a steady stream of growth 

Chris Neiger (Roku): Roku's gains have been phenomenal over the past year, rising more than 200% over the past 12 months (even after a significant pullback earlier this year). But there could still be more for investors to celebrate ahead. 

Roku has created one of the most prolific video streaming platforms, which allows its users to stream the movies and shows that they love from the subscription services they want.

This means that no matter what video content you want to watch, you can probably do it from Roku's streaming platform. And that's the beauty of the company's business -- no matter who is winning the streaming wars, Roku will benefit from this market.

The company has shown outstanding growth over the past several years and in the most recent quarter (reported on May 6) Roku said it had 53.6 million users who collectively streamed more than 18 billion hours of content. 

Roku makes money from taking a cut of the subscription services users sign up for through its platform and from advertising. Investors will be happy to know that not only did revenue spike 79% in the most recent quarter but average revenue per user (ARPU) also jumped 32% from the year-ago quarter. 

But why would it be wise to add to your current position in Roku (or start one) right now? Because the shift from traditional pay-TV to streaming services is still ongoing and Roku should continue to benefit from the trend. 

By 2024 more than one-third of U.S. households will have cut the cord to satellite and cable subscriptions and most will shift their viewing habits to streaming services. Just under half of all U.S. households are signed up for four or more video streaming services, and as that percentage grows Roku will continue to collect a slice of those subscriptions. 

Additionally, Roku says its total ad impressions in the first quarter of this year more than tripled from the year-ago quarter. And as more viewers shift from traditional TV to streaming services, advertising dollars will follow them. 

For all of these reasons, Roku's stock still looks like a buy. The company's platform is second to none and its growth in the video streaming space is proof that Roku is successfully tapping into the long-term video streaming services trend.