Over the long run, the stock market is a proven wealth creator. Despite undergoing 38 double-digit percentage corrections since the beginning of 1950, the benchmark S&P 500 has put each and every one of these declines firmly in the rearview mirror. What this tells us is that if investors allow their thesis to play out over time, they have a very good chance at making money.
But why settle for market-matching returns when you can buy game-changing stocks that have the potential to run circles around the S&P 500? If you have $5,000 ready to invest, which won't be needed to pay bills or cover an emergency, the following five game-changing stocks could turn your initial investment into $50,000 (or more) by 2035.
Biotech stocks are often on the leading edge of innovation. Even though it's only a clinical-stage drug developer, for the time being, Novavax (NVAX 4.64%) has all the tools needed to become a major player in the drug space by 2035.
As you may have rightly guessed, Novavax has been gaining buzz for its experimental coronavirus disease 2019 (COVID-19) vaccine, NVX-CoV2373. In a March-published U.K. study, this vaccine generated a vaccine efficacy (VE) of 89.7%. Three months later, the phase 3 U.S./Mexico study data was reported, yielding a VE of 90.4%.
This two-dose regimen looks to be highly effective and safe, and could potentially displace both the AstraZeneca and Johnson & Johnson COVID-19 vaccines in developed markets. Novavax will likely gain emergency use authorization in the U.S., U.K., and Europe in the coming months.
The rise of COVID-19 variants is also paving the way for Novavax to become a go-to supplier of booster shots. The company's drug-development platform is designed in such a way that Novavax should be one of the first to market with variant-specific booster vaccines. It's also in the early stages of working on a combination influenza/COVID-19 vaccine. There are countless possibilities for combination vaccines, which makes Novavax an intriguing bet to significantly grow investors' nest eggs over the next 14 years.
The Original Bark Company
Although small-cap stocks can be hit-or-miss, The Original Bark Company (BARK -3.42%) could be a portfolio superstar for the next decade and beyond. As its name implies, Bark caters its products and services to dogs.
Few industries are recession-proof, but the pet industry has more or less shown that it belongs in that grouping. It's been at least a quarter of a century since year-over-year U.S. pet expenditures have declined, and the number of households owning a pet in the U.S. has been on a multi-decade incline. Owners will spend big bucks to ensure the well-being of their furry family members.
What makes Bark so interesting is its online subscription approach. Even though it does have its products in about 23,000 retail locations nationwide, only 10% of its sales come from in-store commerce. The remaining 90% is derived from monthly subscription services. The benefit of this is predictable cash flow, improved brand loyalty, and most importantly, lower overhead costs. Not surprisingly, Bark has consistently produced a juicy gross margin of around 60%.
Bark is also leaning on innovation and data to drive growth. The introduction of Bark Eats should be particularly fruitful. Bark Eats works with owners to develop a personalized dry food diet for their pooch.
With sales expected to triple over the next five years, Bark is a good bet to retrieve market-topping returns for investors.
Planet 13 Holdings
Chances are when you think of marijuana stocks, you don't think of anything innovative or game-changing. After all, cannabis is just a plant. However, multistate operator (MSO) Planet 13 Holdings (PLNH.F -3.29%) is demonstrating that pot stocks can offer game-changing differentiation.
While most U.S. MSOs are planting their proverbial flags in as many legalized markets as possible, Planet 13 has chosen to develop its limited store count into a true cannabis experience. Its flagship SuperStore in Las Vegas spans 112,000 square feet and includes a consumer-facing processing center, events stage, restaurant, and abundant selling space. Meanwhile, its Santa Ana, California location will span 55,000 square feet when complete and feature more than 16,000 square feet of selling space. No other dispensaries compare to the experience offered by Planet 13.
If the company is able to translate its success and lessons learned in Nevada to other tourist-friendly markets, we could be witnessing the birth of a cannabis superstar. Following the Orange County store opening in Santa Ana on July 1, Planet 13 announced it's been awarded a license in Chicago, and plans to enter the Miami and Orlando markets in Florida.
With Planet 13 on the cusp of recurring profitability, now is a great time for long-term investors to pounce.
Another stock with game-changing potential that could turn a $5,000 investment into $50,000 or more by 2035 is gaming platform Skillz (SKLZ -0.68%).
Admittedly, the gaming space is highly competitive, costly, and crowded. Rather than go up against some of the biggest players in the industry on the development front, Skillz chose to develop a platform that allows mobile gamers to compete against each other for cash prizes. Both Skillz and a game's developer keep a portion of the cash, with the remainder going to the winner.
What's particularly intriguing about Skillz is how well the company is converting players to the paying side of the equation. Following the March-ended quarter, Skillz announced that it had 467,000 monthly paying users, or 17% of its gaming base. By comparison, the industry average conversion rate on pay-to-play is only around 2%. This is doubly impressive when you factor in that Skillz is maintaining a gross margin of 95%.
For the moment, Skillz is losing quite a bit of money as it increases its headcount, boosts marketing, and aims to make bolt-on acquisitions. But if the company's lightning-fast growth continues, and it's able to maintain its vastly superior pay-to-play conversion rate while striking up new partnerships, Skillz could be a big-time winner for patient investors.
A final game-changing company that could deliver life-altering gains for investors is hosting-and-stay platform Airbnb (ABNB 2.29%).
As you can imagine, Airbnb's hosting platform was blindsided by the pandemic in 2020. But what's really important here is to understand that bookings jumped fivefold in the three years leading up to the pandemic. Though Airbnb is spending some of its capital on marketing, the vast majority of its users are finding it organically or through referral.
What's more, the company's fastest-growing category is long-term stays, which are defined as stays of 28 or more days. This demonstrates the stickiness of the platform and the likelihood that hosting will become a sustainable lifestyle choice once the pandemic is over.
Of course, Airbnb isn't satisfied simply being the go-to hosting platform. The introduction of Experiences a few years back marks the company's attempt to infiltrate all aspects of travel. By partnering with local experts to lead adventures, Airbnb is opening the door for other partnerships that could entail transportation, food, and more.
We're likely witnessing the birth of a true disruptor with Airbnb, which gives it a good chance to make long-term investors a lot of money.