A lot of stocks will bounce back from the recent downturn on Wall Street. If you want your best shot at beating the market at this point, it's better to bet on the disruptor than the disrupted. If a company is rattling an industry -- and gaining market share in the process -- it's worth your time and attention.
Trex (TREX +3.96%), Twilio (TWLO +2.30%), and Bumble (BMBL 1.51%) are three disruptors that are shaking up their markets. They're the new leaders to watch. Let's take a closer look to see why they could be smart buy candidates this month.
Trex
You don't tend to look at your backyard as a hotbed for disruption, but traditional wooden decks are a hassle. Every few seasons they need to be painted and stained. Wood planks can rot, splinter, or become a buffet for termites. Trex offers composite decking that lasts for years without maintenance. It looks great, and since it consists of largely reclaimed wood and plastic film, it checks off the eco-friendly box.
Trex is rolling along steadily these days. Revenue rose 38% through the first three months of this year, and that follows a 36% increase on the top line for all of 2021. The housing boom and suburbanization trend are helping, but this isn't just a pandemic play that has seen folks in dense cities scrambling to the 'burbs to get more elbow room and outdoor entertaining space. It has come through with double-digit revenue gains in 9 of the last 10 years.
The near-term concern here is that interest rates are rising, something that could not only trip up the buoyant housing market but also the ability for folks to finance outdoor decking projects. However, extending a home's living space outdoors will continue to be high on homeowner wish lists. Trex dominates its niche, which continues to gain market share at the expense of traditional wood decks. Trex yourself before you wreck yourself.
NYSE: TREX
Key Data Points
Twilio
Disruptions can set off secondary disruptors. One of the biggest disruptions of our time is the smartphone. You now have a computer in your pocket. You can fire up an app just as you would a program on your old computer, and here's where Twilio comes in to raise the bar.
Twilio is the leading provider of in-app communication solutions. You've seen Twilio in action; you just don't realize it's happening. When the driver bringing your takeout order lets you know that they're there, that's Twilio. When your vacation villa booking app has the owner of the property confirm availability with you without having to leave the application, that's also likely Twilio.
Your smartphone is that much more useful because of Twilio, and the growth continues to be explosive. Revenue rose 48% -- or a still better-than-expected 35% on an organic basis -- for its latest quarter. The apps you use the most likely have an in-app communication feature, even if it's for something as simple as resetting your password without having to leave the program. Twilio's going to be hanging out in your pocket for a long time.
NYSE: TWLO
Key Data Points
Bumble
You don't have to think hard to figure out what disrupted traditional courting practices. Online dating -- and eventually online dating apps -- made it easier than ever to scroll through potential pairings to find your next partner. Match Group's (MTCH +2.19%) Tinder is the top dog in this trend, and it's here where Bumble was born.
Whitney Wolfe Herd was part of Tinder's founding team in 2012. Frustrated by the male-dominated culture at the company, she founded Bumble two years later. Unlike Tinder, where all users could swipe left or right to reject or accept a proposed match, Bumble only lets women initiate communication for a male-female match.
Bumble is growing faster than Tinder parent Match Group, increasing its revenue at an annualized 29% clip over the last three years (compared to 20% for Match). Changing the game within a changed game can pay off nicely, and Bumble's future is worth a swipe in the right direction.
NASDAQ: BMBL
Key Data Points
Trex, Twilio, and Bumble are promising companies shaking up their industries. The stocks are currently on sale. Trex and Bumble have been cut roughly in half since peaking last year. Twilio has shed nearly 75% of its peak value. They are smart growth stocks for thinking investors. Once the market starts to bounce back, these disruptors should bounce back even stronger.
