For many investors, the new year got off to a rough start. Both the growth stock-dependent Nasdaq Composite and broad-based S&P 500 underwent their largest correction since the March 2020 pandemic-induced crash.
Though big moves lower in the benchmark indexes can be nerve-racking in the short run, they're historically an excellent opportunity to buy into game-changing businesses at a discount. This is especially true for investors who plan to hang onto their holdings for many years, if not a decade.
If you've dreamt of becoming a millionaire, the following five unstoppable stocks can help you reach your goal. These innovative companies have all the tools needed to turn a $150,000 investment into $1 million by 2032, or possibly sooner.
The first stock that could deliver a 567% (or greater) return over the next decade and make people millionaires off a $150,000 investment is cloud-based lending platform Upstart Holdings (UPST 4.03%).
The traditional lending process, at least for personal loans, can be slow, arduous, and costly, for both banks and the customer attempting to take out a loan. Rather than relying on this one-size-fits-all lending approach, Upstart's platform leans on artificial intelligence (AI) and machine-learning to more accurately determine the creditworthiness of customers. Approximately two-thirds of the applications processed by Upstart have led to instant approvals. This means fewer hassles for customers and lower costs for Upstart's banking partners.
For the time being, Upstart is primarily focused on personal loans. But its acquisition of Prodigy Software, which closed last year, gives it a pathway to oversee auto loan originations. The auto loan origination market value is 8.3 times the size of personal loans. In other words, Upstart is really just scratching the surface with regard to how its cloud-based platform can assist lenders and consumers.
Something else to note about Upstart is that more than 90% of its revenue derives from the fees it collects form banks and service centers. Since it has no direct credit exposure, a rising interest rate environment and/or contracting economy won't adversely affect its business.
Don't forget about small-cap stocks when you're looking for companies that can 6X your initial investment. Cloud-based programmatic ad company PubMatic (PUBM 1.29%) is the perfect example of a small-cap company with a huge runway.
Programmatic advertising describes the process of using machine-learning software to handle the buying, selling, and optimization of ads. PubMatic is a sell-side provider, which simply means it aims to sell digital advertising display space for its clients, the publishers. The company's platform is responsible for walking a fine line between generating as much revenue as possible for display space and putting relevant content in front of users. If it keeps advertisers happy, it often means PubMatic's clients see their pricing power increase over time.
The beauty of PubMatic's operating model is that we're witnessing a steady shift of ad dollars away from print and toward digital channels. Whereas the expectation is for global digital ad spend to grow by 10% annually through mid-decade, PubMatic's top-line has been growing at many multiples of this pace for years. The company has delivered four consecutive quarters of at least 50% organic growth, thanks primarily to increased programmatic ad demand in connected TV and over-the-top settings.
PubMatic looks to be a surefire winner for patient investors.
Another unstoppable stock with the ability to turn $150,000 into a cool $1 million by 2032, or possibly sooner, is telemedicine kingpin Teladoc Health (TDOC 3.89%).
The big knock against Teladoc has long been that it's "just a pandemic play." While it did find itself in the right place, at the right time, when the pandemic struck, there's clear evidence that telehealth is a movement that had legs long before the coronavirus pandemic arrived. For example, Teladoc averaged 74% annual sales growth in the six years leading up to 2020. That's not a fluke. It's representative of a shift in the way personalized care is being administered.
The great thing about telehealth services is they're a benefit for all parties throughout the healthcare treatment chain. Virtual visits are more convenient for patients, and they can allow physicians to keep better tabs on chronically ill people, resulting in improved patient outcomes. A better outlook for patients should result in less money out of the pockets of health insurers. This suggests insurers will push for increased telehealth use in the wake of the pandemic.
Teladoc's telehealth platform, coupled with Livongo Health's AI-driven service to help chronic-care members lead healthier lives (Teladoc acquired Livongo in Q4 2020), represents the future of personalized care in the U.S.
Planet 13 Holdings
Most U.S. multistate operators have chosen to open up retail locations or cultivation farms in a lot of legalized states. Planet 13, on the other hand, only has two operating dispensaries. But these aren't your run-of-the-mill pot shops. The Las Vegas SuperStore spans 112,000 square feet and features a café, events center, and consumer-facing processing center. Meanwhile, the Orange County, Calif., SuperStore is 55,000 square feet, 30% of which is devoted to selling space. Planet 13's stores are just as focused on the experience of cannabis enthusiasts as they are on making a sale.
Aside from the sheer size of these SuperStore's, Planet 13 is relying on technology, personalization, and branding, to drive results. For instance, the Las Vegas SuperStore has self-pay kiosks for customers who know what they want. The store also provides personal budtenders to guide shoppers through their experience. But it's the introduction of proprietary brands that could really drive margins higher.
With plans to expand to Chicago, Miami, and Orlando, Planet 13's sales growth won't be slowing anytime soon.
A final unstoppable stock that can turn $150,000 into $1 million in 10 years or less is companion animal health insurer Trupanion (TRUP -0.81%).
Next to food and utilities, there's arguably not a more recession-resistant industry or sector than pets. According to the American Pet Products Association, 70% of U.S. households now own a pet, up from 56% in 1988. What's more, it's been at least a quarter of a century since year-over-year spending on companion animals declined in the United States. No matter what sort of economic catastrophe is thrown at consumers, pet owners continue to open their wallets wider for their four-legged family members.
What makes Trupanion so intriguing is its potential pool of clients. Only around 1% of companion animals in the U.S. are insured, along with 2% in Canada. Trupanion estimates that a 25% penetration rate in these markets, which equals the pet insurance penetration rate in the U.K., would equate to a $34.1 billion addressable market. That's huge, and it's growing larger seemingly every year.
Aside from topping 1.1 million enrolled pets in the September-ended quarter, Trupanion brings two decades of industry rapport to the table, as well as its proprietary software that allows for payments to be made in clinics at the time of service. It has clear-cut advantages in the pet insurance space and appears primed for sustained double-digit growth throughout the decade.