On Thursday, Oct. 21, the widely followed S&P 500 did what it's done more than four dozen times this year: It hit a new all-time closing high. Since bottoming out during the initial wave of the coronavirus pandemic in March 2020, the S&P 500 has more than doubled in value.
For some investors, the idea of putting money to in stocks with the market constantly nipping at new highs isn't appealing. But for investors with a long-term mindset, there's no such thing as a bad time to buy into great businesses.
Best of all, you don't need a boatload of cash to begin building wealth on Wall Street. Since most online brokerages have eliminated commissions and minimum deposit requirements, even $50 can go a long way to furthering your journey to financial independence.
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If you have $50 ready to invest, which won't be needed to pay bills or cover emergencies as they arise, you have more than enough to buy into the following trio of no-brainer stocks right now.
Skillz
The first no-brainer stock patient investors can buy right now with $50 is mobile gaming platform company Skillz (SKLZ 0.34%). Shares of Skillz have lost more than three-quarters of their value since peaking in early February.
I know what you might be thinking, and you're correct: The gaming industry is highly competitive and offers no assurances that developed games will be a success. What makes Skillz such an intriguing company is that it's avoided the costly development side of the equation and focused its efforts on being a platform where gamers can compete against each other for cash prizes. Since it's considerably cheaper to operate and maintain a middleman gaming platform than it is to develop mobile games, Skillz has consistently cleared a 95% gross margin.
Something else that should intrigue investors about Skillz is the company's pay-to-play conversion rate. Industrywide, only around 2% of gamers are converted to paying members. Meanwhile, in the March-ended quarter, Skillz notes that 17% of its monthly active users were paying to play on its platform. If the company can maintain a conversion rate that's many multiples higher than the industry average, it shouldn't have any trouble eventually generating juicy operating margins.
Partnerships offer another pathway for Skillz to shine. For instance, the company signed a multiyear agreement with the National Football League (NFL) in February. This deal allows developers to create NFL-themed games that'll run on the company's platform as early as next year. As a reminder, football is the most-popular sport in the United States.
Over the next couple of quarters, it would not be a surprise for higher marketing costs and rising headcount to weigh on the company's bottom line. But with all of its puzzle pieces fitting into place, revenue should continue to soar. Within a few years, I suspect investors will be handsomely rewarded for their patience.
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Columbia Care
Another really smart way to invest $50 right now is to put it to work in the U.S. cannabis industry. Specifically, multistate operator (MSO) Columbia Care (CCHWF -2.81%) looks ripe for the picking.
To state the obvious, the U.S. is where marijuana investors want to put their money to work. Even though global weed revenue is climbing, the U.S. is expected to account for the lion's share of pot sales by mid-decade. Cannabis-focused analytics company BDSA is estimating U.S. weed sales will hit $47.6 billion in 2026, compared to $62.1 billion in worldwide pot revenue. This puts Columbia Care right in the thick of the industry's strongest growth.
Marijuana stock Columbia Care has two core strategies that its management team believes will help it succeed.
First off, the company has predominantly expanded into limited-license markets. These are legalized states that purposely limit how many retail licenses are issued in total, as well as to a single business. With regulators reining in competition, a company like Columbia Care, which already had a well-established medical presence in a number of top-selling states, is free to further build up its brands for adult-use customers without having to worry about getting trampled by an MSO with deeper pockets.
The second, and arguably more important, aspect of the company's growth strategy is its penchant for acquisitions. Columbia Care has made a number of key buyouts since the beginning of 2020 that are designed to quickly expand its reach. On one hand, costs associated with these acquisitions are probably going to weigh on the company's near-term operating results. But beginning in 2022, we should see these deals paying dividends.
With Wall Street expecting the company's sales to nearly triple between 2021 and 2024, and the company likely turning the corner to recurring profitability next year, the time to scoop up Columbia Care on the cheap is now.
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Palantir Technologies
A third no-brainer stock long-term investors can confidently buy right now with $50 is data-mining company Palantir Technologies (PLTR -1.21%).
If there's one aspect about Palantir that has the potential to jump out and grab prospective investors, it's the uniqueness of its operating model. There's isn't another company with an artificial intelligence-driven data-mining platform like Palantir. It's likely to see sustainable double-digit sales and bookings growth for many years to come.
Palantir is comprised of two core platforms, Gotham and Foundry. Gotham is the company's government-focused platform that aids with military missions and other big-data projects and analyses. Meanwhile Foundry is Palantir's enterprise-directed platform that helps businesses streamline their operations.
At the moment, Gotham is Palantir's leading sales contributor. Palantir has had no trouble securing big, multiyear contracts from the U.S. government. These contracts have played a key role in pushing its total remaining deal value across all platforms, as of the end of June, to $3.4 billion.
However, Palantir's long-term appeal arguably lies with Foundry. Whereas Gotham's application may be limited for security purposes, there are sea of potential domestic and global businesses that could benefit from a platform that can help them make sense of big data. When Palantir released its prospectus last year, prior to becoming a publicly traded company, it only had 125 companies utilizing Foundry. The runway for growth here is enormous.
Although Palantir isn't exactly inexpensive in a strict fundamental sense, it has the sustained growth potential and tools necessary to command a premium.
