When making investment decisions, the price of a company's stock is becoming less of a barrier. With many online brokerages offering fractional shares, investors can purchase dollar amounts of any company they choose regardless of its share price.
That said, not all investors have access to fractional shares, and those with limited funds may be tempted to focus on the share price as much as company strength. While some stocks priced under $100 are best to be avoided, here are two that have posted strong results and are poised for future success.
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Revolve Group
Online retailer Revolve Group (RVLV 1.07%) caters to millennial and Generation Z consumers. Using a strategy built around social media influencers and live events, Revolve has been very successful and stands to do even better as pandemic restrictions further recede. At the time of this writing, Revolve's share price is still only $60 even after rising more than 50% over the past year.
In its fiscal third quarter, Revolve grew its revenue 62% year over year to $244 million, marking the company's second consecutive quarter of 60% revenue growth. Gross profit followed suit, increasing 61% to $134 million. Net income was down 14% year over year to $17 million, but on a two-year basis -- which helps smooth out pandemic-related headwinds -- net income rose 74%.
On the user front, active customers grew 12% to 1.7 million, orders placed increased by 60%, and the average order value rose 19% to $276. These customer metrics are important and should continue to improve as the company becomes able to host more of the live events that are central to its business model.
Revolve also made a big move related to its influencer strategy, naming Kendall Jenner the creative director of the company's Forward luxury segment. Jenner was able to leverage her social media presence immediately, creating a video about her role with the company that has been viewed more than five million times.
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Brunswick Corporation
Navigating under the radar of most investors is a boating company, Brunswick Corporation (BC -0.27%), that has been quietly impressing on multiple fronts.
In late January, Brunswick reported a record 2021 fiscal year. Revenue grew 35% over the prior year, operating earnings jumped 51%, and operating margins expanded 150 basis points to 13.9%. The company saw impressive growth in all three of its major segments with propulsion, parts and accessories, and boats growing revenue 12%, 40%, and 14%, respectively.
Within its boats segment, there's an interesting business called Freedom Boat Club (FBC). This subscription service allows members access to marinas all over the world where they can enjoy the boating lifestyle without having to own a boat or deal with all the maintenance costs and hassles that come with boat ownership.
Over the past 12 months, FBC has added 75 new locations and over 100,000 new members. These locations operate over 4,000 boats, an increasing percentage of which are Brunswick boats and engines. While FBC currently only accounts for 3% of the boat segment's revenue, it attracts a younger and more diverse customer demographic, which is important for Brunswick's future.
Speaking of the future, there's reason to believe the recent results will continue. Strong demand for boats has left inventories at historically low levels; there were 20% fewer boats in dealer inventories at the end of the fourth quarter when compared to a year ago. With a share price of $97, Brunswick stock is trading at about the midpoint of its 52-week range -- a reasonable level.
Where to spend that $100
Both of these two companies are worth considering and could provide some diversity in a portfolio. Revolve is smaller and growing revenue much faster and so it will likely be more volatile. With its long history, Brunswick provides more stability along with some growth too. Both are solid choices, and investors can choose which fits in best with their overall portfolio strategy.
