Investing your hard-earned money is serious business. I don't recommend doing it on a whim, based purely on last Wednesday's water cooler chatter, or because this ticker looks hot on social media sites today.
There is still a time and a place for the occasional no-brainer buy, though.
I mean, I know some stocks so well that it becomes obvious when they are on fire sale for no good reason. I have done my homework for years, analyzing financial data, reading quarterly reports, and listening to management's conference calls. I'm familiar with their histories, their current challenges, and their future opportunities. So when Mr. Market looks at the current situation or recent news and jumps to the wrong conclusion, I'll be ready to take action immediately.
That's what is happening right now with a handful of my favorite stocks and companies. On that note, let me show you why I would buy Fiverr International (FVRR -1.81%), Roku (ROKU -0.40%), and Coinbase Global (COIN -2.31%) in a heartbeat these days.
Fiverr: A new way of working
As a leading service provider in the gig economy, Fiverr is changing how businesses get their work done and how people think about careers.
The market is growing like gangbusters. According to a recent study by Fiverr rival Upwork, 60 million Americans got paid for freelance services last year, up from 53 million in 2021 and 50 million in 2020. There is also plenty of room for continued hypergrowth, as freelance gigs accounted for just 5.8% of the American economy in 2022.
And most freelance jobs are still managed through pen and paper, handshake agreements, phone calls, and other old-school methods. The opportunity to take this process online is enormous. Fiverr set up $1.1 billion of freelance gigs in the third quarter of 2022, counting 30% of that value as revenues through service fees. That sounds like a lot, but the run rate of $4.4 billion works out to just 0.3% of the $1.5 trillion in American freelance revenues annually.
The future of entertainment depends on Roku
You know all about the streaming video wars. Will Netflix, Amazon Prime, or Disney+ build the world's largest customer base in the end? It seems to be a toss-up so far -- but you can invest in this exploding market without picking a winner.
Instead, you should look to streaming technology expert Roku. As the most experienced provider of viewer-friendly streaming devices and software packages, the company dominates that space in North America. In a recent Conviva report, Roku accounted for 33% of domestic video-streaming time in the second quarter of 2022. Amazon's Fire TV devices landed in second place with a 14.5% share of viewing hours. No one else broke the 10% barrier. In other words, it's not even close.
So Roku should be a winner as long as the media-streaming market is expanding, and the company is likely to add to that growth by expanding its international reach. The runway of continued growth goes miles and miles ahead, as even the most advanced streaming market in the world (the U.S., of course) holds less than 40% of total video-viewing time. In most countries, the streaming video market share stops in single-digit percentages.
Image source: Netflix Q4 2022 earnings report.
The streaming content kings can't make a move without Roku's support. Launching a new service that won't play on Roku-based devices would erase many millions of potential customers from the equation. The service-agnostic master of streaming technology platforms comes to the deal-making table with a ton of leverage.
It's Roku's streaming media world. The other companies just live in it.
Coinbase: A cryptocurrency innovator
My interest in cryptocurrency trading expert Coinbase goes back to March 2014, when I opened my account there and picked up my first fraction of a Bitcoin at the modest price of $587 per full token.
Back then, cryptocurrencies were somewhere between an unproven idea and an outright joke. Things have changed over the years. Now, I expect Bitcoin and other cryptocurrencies to disrupt many of the era's most powerful industries, such as banking, insurance, payment processing, and financial contracts.
Coinbase was a first-mover that helped crypto rookies like yours truly dip our toes into the digital asset waters, and then used crypto-based reward payments for taking educational quizzes about various concepts. Thanks to its early entry and innovative customer loyalty programs, Coinbase now holds a dominant 42% share of the market for exchanging traditional currencies like the dollar against newfangled cryptocurrencies.
And the cryptocurrency revolution has only just begun. The long-term target market should be nearly every consumer in areas served by the company, which currently includes the U.S., Canada, and most of Europe. That's nearly one billion potential Coinbase customers -- before contemplating the idea of expanding into other geographic areas and maybe the whole world -- and Coinbase's current list of 8.5 million monthly active traders is just a drop in that massive bucket.
Four common denominators add up to three no-brainer buys
These three companies have a few things in common:
- I know them like the hairy back of my money-grubbing hand.
- They are facing tremendous long-term growth opportunities.
- The road to massive gains is bumpy in the short term, as it usually is in the early days of any game-changing market disruption.
- Wall Street has shrugged off the deep-rooted growth trajectories of the video streaming, crypto-trading, and freelancing markets, instead nitpicking on temporary slowdowns during a global inflation crisis.
As a result, I am deeply convinced that Coinbase, Roku, and Fiverr will survive this economic crisis and thrive in the long haul. At the same time, their stock prices fell dramatically in 2022. Fiverr's stock price is down by more than 45% over the last year, and Roku and Coinbase are showing at least 55% price drops over the same period.
And that's why I'm ready to slam the "buy" button for any of these three stocks the next time I have some investable cash looking for a stable and profitable home.
Maybe you haven't read up on these three companies deeply enough to make your own deeply brainy no-brainer buys. In that case, this would be a good time to catch up on your reading.
