There are two kinds of companies out there. You have disruptors, and you have the disrupted. If a company invest in isn't shaking up its industry, it's just a matter of time before another company will. As a growth investor I'm drawn to companies willing to shake up the stodgiest of industries. Let me tell you about three opportunities that I love right now.
Tesla (TSLA 15.90%), Roku (ROKU 4.02%), and Teladoc Health (TDOC 2.73%) are reinventing the automotive, TV, and general healthcare markets. Tesla is an obvious disruptor, and one of the few high-octane growth stocks to crush the market. Roku and Teladoc have fallen sharply in recent months, but their current valuations make them tempting right now. Let's take a closer look at all three disruptors.
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Tesla
CEO Elon Musk is a polarizing helmsman, but there's no denying that today's booming popularity of all-electric vehicles is the handiwork of Tesla. The Roadster, Model S, and Model X made electric vehicles cool and aspirational. The larger subsequent rollout of the Model 3 and Model Y made ownership viable for the mainstream market.
Tesla's disruption didn't stop there. Unlike every other automaker that's at the mercy of third-party charging stations to propel its cars, Tesla's proprietary network of Supercharger stations has carved out choice locations to allow owners to travel across the country without having to rely on third-party operators. This is a bigger moat than non-Tesla drivers think, and Tesla in a sense makes both the cars and operates all of the "gas stations" that its drivers will ever need away from home.
Tesla also is a disruptor in terms of technology. Recalls are often a matter of just an over-the-air software update. Then we get to autonomous driving. Tesla is a leader in automating a lot of aspects of the driving experience, and it culminates in its Full Self-Driving -- or FSD -- add-on. FSD is currently in beta testing, so it's fair to say that Tesla has a long way to go before achieving fully autonomous driving. However, that hasn't stopped people from paying what is now $12,000 -- or $199 through a monthly subscription -- for access to some features and a foot in the door for the eventual rollout.
Tesla stock isn't cheap. It's already the country's fifth-most valuable publicly traded company by market cap. However, disruption deserves a premium.
Roku
Pioneers don't often get the last laugh in the disruption process, but that's what happened with Roku. Founder and CEO Anthony Wood had already earned his disruptor stripe when he invented the digital video recorder (DVR), only to see another company excel in that niche. He's making sure it doesn't happen with other innovation -- an operating system that serves as a hub for thousands of streaming services.
Roku competes with three of the market's most valuable tech companies in this niche, but it has nearly double the market share of its largest competitor. Roku is able to compete with its low-priced dongles and deals in place to come standard in 38% of all smart televisions sold in this country.
Growth is slowing at Roku, with revenue climbing 33% in its latest quarter and guidance calling for a 25% year-over-year advance for the current quarter. It still has more than 60 million active users on its platform, and average revenue per user continues to grow with every passing quarter. The stock hit new 52-week lows recently, making it an opportunistic time to pick up a leader in an expanding industry.
Teladoc Health
Another disruptor that has hit hard times is Teladoc Health. The stock has plummeted 75% since peaking 13 months ago. The provider of telehealth services lets folks go online to receive virtual medical care. This has become a competitive market lately, but Teladoc is still finding ways to grow. It completed 4.4 million virtual visits in its latest quarter, a 41% increase over the past year. Revenue rose 45%.
The stock got a boost this week after the company announced it was partnering with Amazon to roll out Teladoc on Alexa. Offering access to virtual healthcare to owners of Amazon's digital assistant is cool in theory, but it's also comforting, since the leading e-tailer's push into health services has been seen as a threat to Teladoc. The two companies playing nicely here suggests that they may be able to get along in a competitive climate.
Tesla, Roku, and Teladoc are strong growth stocks. They're posting double-digit revenue growth as they continue disrupting their markets. Tesla has a lot of track left to run, and the discounts on Roku and Teladoc relative to their historical valuations make them easy to love here.
