If there's a lesson Wall Street is always willing to teach, it's the importance of being patient. Despite the broad-based S&P 500 enduring 38 double-digit percentage corrections since the beginning of 1950, each and every one of these declines was eventually erased by a bull market rally. With time as their ally, investors give themselves an excellent opportunity to build wealth.
But in addition to being patient, it helps if you own game-changing stocks. Businesses that are on the leading edge of innovation within their respective industries have the potential to deliver life-altering gains to investors.
If you have $1,000 at the ready that won't be needed to pay bills or cover emergencies, the following three game-changing stocks can be bought right now.
Image source: Getty Images.
Meta Platforms
For the past two weeks, growth stocks with high valuation premiums have been clobbered. However, Meta Platforms (META -4.13%), the parent company of Facebook, doesn't fit the bill of a growth stock with a premium. It's an innovative company with sustainable double-digit growth potential that's downright cheap on a valuation basis.
Meta's bread and butter has always been social-media platform Facebook, and it will probably remain that way for some years to come. Facebook had 2.91 billion monthly active users (MAUs) to its namesake site during the third quarter, as well as 670,000 unique MAUs visiting one of its other owned assets, such as Instagram or WhatsApp.
This works out to more than half of the global adult population interacting with a Meta-owned asset each month. With so many eyeballs at their disposal, advertisers will pay through the nose for placement on Facebook and Instagram.
As a quick side note, keep in mind that Meta is only seriously monetizing Facebook and Instagram with ads. If and when the company chooses to meaningfully monetize WhatsApp and Facebook Messenger, we could be looking at another massive surge in sales, operating cash flow, and profits.
Looking ahead, Meta will be spending billions on the metaverse. The metaverse describes the next iteration of the internet, which involves 3D-virtual environments that users can interact with. The metaverse should provide the company with multiple new channels to generate revenue.
For a company that's consistently grown by 20% or more annually, a forward-year price-to-earnings ratio of just 21 is too inexpensive to pass up.
Image source: Getty Images.
PubMatic
Another game-changing stock investors can confidently invest $1,000 in right now is small-cap advertising-technology company PubMatic (PUBM 0.33%).
Before the internet, buying and selling ads was an arduous process that was slow and inefficient. But following the advent of the internet, it became increasingly easier to optimize the purchase, sale, and placement of ads. PubMatic's cloud-based infrastructure is the next-generation of ad-tech platforms.
PubMatic is a sell-side provider, which means its clients are publishers, and it's angling to sell their digital-display space. Interestingly, though, the highest-priced ad isn't always the one chosen. PubMatic's machine-learning algorithms understand that placing relevant ads in front of users will not only keep advertisers happy, but also will likely increase the pricing power for its clients over the long run.
Furthermore, we've been witnessing a steady shift in advertising dollars toward mobile, video, and streaming channels, which is PubMatic's specialty. Whereas the digital-ad industry is expected to grow by an annualized rate of 10% through mid-decade, PubMatic has continually doubled this growth rate.
For instance, PubMatic's third-quarter results featured a net dollar-based retention rate of 157%. In simple terms, this means existing publishers from the year-ago quarter spent 57% more in the recently ended quarter. This marked the fourth consecutive quarter of at least 50% organic growth. These growth figures suggest this company is only getting started.
Image source: Getty Images.
Novavax
A final game-changing stock that can be aggressively purchased by patient investors with $1,000 is biotech stock Novavax (NVAX 2.06%).
The buzz surrounding Novavax has to do with its development of NVX-CoV2373, a coronavirus disease 2019 (COVID-19) vaccine. In the U.K. and U.S./Mexico trials, NVX-CoV2373 produced a vaccine efficacy (VE) of 89.7% and 90.4%, respectively. Although VE isn't the end-all when it comes to COVID-19 vaccine effectiveness, its looks as if it'll be enough to potentially make Novavax a top-three vaccine provider.
You might be asking, "If the trial results were so good, why has the company's share price lagged so badly throughout much of 2021?" The answer has to do with emergency-use authorization (EUA) filing delays, as well as concerns about the company's vaccine production and purity.
Thankfully, many of these worries are being firmly placed in the rearview mirror. Novavax's vaccine has been given the green light in Indonesia and the Philippines, and the company has filed for the equivalent of EUA approval in a number of core markets over the past six weeks.
Something else to consider here is that COVID-19 is likely an endemic illness. Given the mutability of the SARS-CoV-2 virus that causes COVID-19, Novavax's ability to generate revenue from vaccines isn't a one-time thing. The company's drug-development platform should allow it to bring in recurring revenue as it focuses on initial inoculations, booster shots, and tackles worrisome variants.
The company can also differentiate itself with combination vaccines. Novavax has a real shot to bring a combination COVID-19/influenza vaccine to market well before its peers. That makes this biotech stock, which is valued at an absurdly cheap six times forward-year consensus earnings, an absolute steal.
