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2 No-Brainer Stocks to Buy Now and Hold Forever

By Trevor Jennewine – Oct 9, 2021 at 11:49PM

Key Points

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E-commerce is gaining market share, and both of these companies should benefit from this massive trend.

Investing ideas can come from many places, but I often start by considering highly impactful global trends. For instance, e-commerce has changed the world, affording consumers convenience, while making it possible to scale businesses globally (almost) overnight. More importantly, this trend is far from played out.

Last year, consumers spent $4.2 trillion online, but that figure comprised just 17.8% of retail sales worldwide, according to eMarketer. However, that number will tick upward in the coming years, meaning investors still have a chance to cash in as e-commerce gains market share. With that in mind, here are 2 no-brainer stocks to buy now and hold forever.

Making an online purchase, laptop in lap and credit card in hand.

Image source: Getty Images.

1. Etsy

Etsy (ETSY 1.03%) is an e-commerce marketplace for handcrafted and vintage goods. It connects buyers with millions of creative sellers, helping them find the types of specialized or even personalized items that can't be mass-produced by big-box retailers. Moreover, Etsy has something for everyone, as its diverse inventory ranges from home furnishings and décor to apparel and beauty products.

Broadly speaking, this differentiates Etsy from its rivals. Its brand name has become synonymous with unique products, and that recognition has made it the 8th-most-popular e-commerce platform in the world, outranking the likes of Pinduoduo and Target.

To reinforce that advantage, management has focused on improving search and discovery, making it easier for buyers to find the products they're looking for on the platform. For instance, Etsy recently deployed new artificial intelligence models to better personalize landing pages and make recommendations more relevant for each buyer. These efforts have already boosted conversion rates and repeat purchases, and they caused an uptick in seller ad spending on the platform.

In turn, Etsy's financial performance has been impressive over the last three years.


Q2 2018 (TTM)

Q2 2021 (TTM)



$496.0 million

$2.1 billion


Free cash flow

$109.0 million

$684.3 million


Source: YCharts. TTM = trailing-12-months. CAGR = compound annual growth rate.

Looking ahead, management puts its market opportunity at $437 billion by 2023. To put that in perspective, Etsy's gross merchandise sales totaled $12.4 billion over the last 12 months, representing less than 3% of the company's addressable market.

To capitalize on that opportunity, Etsy recently acquired Brazilian marketplace Elo7, expanding its presence in Latin America, the fastest-growing region of the world in terms of e-commerce sales. And shortly after, Etsy also acquired Depop, a fashion resale marketplace popular with Gen Z consumers; this moves expands Etsy's presence in the apparel sector, the fastest-growing vertical in the e-commerce industry.

More broadly, management remains focused on improving search and discovery, and cultivating trust among buyers through transparent delivery times and improved customer support. Collectively, these growth initiatives should help Etsy take market share in the years ahead. That's why this stock looks like a no-brainer.

2. Shopify

Shopify (SHOP -0.41%) is on a mission to make commerce better for everyone. Its software helps merchants manage their businesses across physical and digital locations, integrating orders from online marketplaces, social media platforms, and custom websites into a single point-of-sale system. Shopify also supplements its software with services, including payment processing, discounted shipping, and financing, as well as an app marketplace that offers thousands of integrations.

In short, Shopify provides an end-to-end solution for modern, omnichannel commerce, helping clients deliver compelling customer experiences in any setting, on any device. And that value proposition is resonating with merchants, as Shopify now powers 1.7 million businesses around the world, up 113% from 2018. In fact, Shopify is the most popular e-commerce software platform on a global basis, holding a 26% market share.

Not surprisingly, this strong competitive position has helped Shopify deliver impressive financial results in recent years.


Q2 2018 (TTM)

Q2 2021 (TTM)



$853.6 million

$3.9 billion


Free cash flow

($31.5 million)

$507.0 million


Source: YCharts. TTM = trailing-12-months. CAGR = compound annual growth rate.

To further strengthen its competitive position, management is investing aggressively in the Shopify Fulfillment Network, an array of robot-powered warehouses across the United States. This infrastructure will allow Shopify to pick, package, and ship inventory on behalf of its merchants, helping them deliver products more quickly and cost-effectively.

Shopify is also investing in the Shop mobile app, a product launched in April 2020. This tool helps consumers discover new brands, track orders, and make purchases, and it allows merchants to engage buyers with automated ad campaigns. In total, the Shop app already has 107 million registered users.

Finally, Shopify recently launched Shopify Markets, a centralized hub designed to help merchants boost sales in international geographies. Collectively, these growth initiatives should enable Shopify to maintain its momentum and capture more of its $153 billion market opportunity. That's why this stock looks like a smart buy right now.

Trevor Jennewine owns shares of Etsy and Shopify. The Motley Fool owns shares of and recommends Etsy and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.

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