It's great when a stock doubles or triples overnight. But those are exceptional situations. The real growth of your portfolio happens when companies report solid earnings increases over time -- and their share prices follow. Often, the companies are market leaders too. This sort of share performance takes time. But it's well worth the wait. That's because the stock movement is based on a company's successful performance. As a result, the gains usually last.
If you've got $3,000 (or even less) to invest right now, I can think of three stocks with potential to deliver impressive long-term gains. You could choose just one of these players. Or you might invest a bit in all three. In either scenario, these companies may double your money by 2030. Let's take a close look at each.
1. Amazon
Amazon's (AMZN 3.43%) share price performance has pretty much gone hand-in-hand with its revenue growth over the past five years. And the stock doubled in that period of time.
Of course, that included the early days of the pandemic, when people opted for e-commerce over visits to physical stores. But Amazon's revenue strength drove similar share gains prior to the pandemic.
Amazon recently completed a stock split. That took its share price down from more than $2,000 to about $120. This makes it easier for a broader range of investors to buy the shares. That's positive. So why aren't the shares climbing? Amazon, like other retailers, is struggling with higher inflation and supply chain issues. That's weighing on earnings right now -- and investor appetite for the stock.
But here's the good news. These problems are temporary. Amazon's cloud computing business is still posting double-digit gains in sales and operating income. And Amazon's Prime subscription service continues to grow in services and member numbers. These elements should lead to more revenue growth for Amazon once the economic conditions improve, and that means Amazon could repeat its share performance of the past.
2. Moderna
When looking at coronavirus vaccine giant Moderna (MRNA 1.69%), two elements are key. I'm talking about the company's cash position and number of candidates in the pipeline. Here's why. Moderna is generating billions of dollars in revenue and profit from its vaccine right now. And I think revenue from the vaccine -- or an updated booster -- will continue at high levels. But investors are no longer rewarding Moderna for its coronavirus success story. They want to see what's next.
Well, thanks to the coronavirus vaccine, Moderna now has more than $19 billion in cash and equivalents. This is important because it will help the company fund its pipeline programs -- and even acquire new candidates or a company if needed. Moderna has 46 programs in development. And, outside of coronavirus candidates, Moderna has three projects in phase 3 studies. These are vaccines for cytomegalovirus, respiratory syncytial virus, and the flu.
Moderna's coronavirus work drove rapid share gains. The stock soared 1,200% over 2020 through 2021. This year, the stock has lost about 50%. Regulatory approval of a non-coronavirus product may not spur an enormous short-term increase. The race to end the pandemic stirred up excitement that other programs might not replicate. But over time, growing revenue from these potential products could help this once dynamic stock to double.
3. Nike
The secret to Nike's (NKE 0.19%) success is brand strength. Like other companies, the maker of athletic shoes and gear is struggling with higher product costs and supply chain issues. But demand for Nike's products remains at record levels, the company said in its most recent earnings report. As a result, even with a difficult economic backdrop, Nike's quarterly revenue rose 5%.
Another key part of Nike's strength has to do with a plan it put in action in 2017. The company focused on selling directly to consumers and beefed up its digital presence. For instance, Nike reduced its number of wholesale partners and honed its relationship with fans through its membership program. As for digital, this now is the fastest-growing part of Nike's business. Digital makes up 26% of Nike brand total revenue.
It's difficult to compare Nike today to the business it was prior to 2017. So, I'll look at the recent past to offer clues about the future. Over the past two years, Nike shares have traded at about 40 times forward earnings estimates. Today, they've dropped to about 23. At the same time, as I mentioned above, revenue continues to grow. Once the temporary problems of inflationary pressures and supply chain challenges ease, Nike's earnings should strengthen. And that could support major stock price gains by 2030.
