Even as the volatile market continues to deliver highs and lows to investors, that doesn't mean you can't continue to work toward your long-term personal portfolio goals. The types of companies you buy, the length of time for which you hold them, and the way you allocate your investment funds across your portfolio are just a few factors that can affect the performance of your holdings in a wide range of markets.
All this being said, wonderful companies with strong core businesses in a robust position to deliver growth over a period of years can help to achieve the results you desire. Let's take a look at two remarkable businesses that could multiply an initial investment over the next decade and beyond.
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX 0.58%) has built a name for itself in the rare disease drug market with its global footprint in the cystic fibrosis treatment space. It's estimated that there are 88,000 people in North America, Europe, and Australia alone that have the genetic disease.
Vertex is the only company on the market with approved CFTR modulators -- drugs that work to correct the underlying genetic malfunction causing cystic fibrosis. Management has said there are still over 20,000 individuals that could benefit from these drugs but aren't yet taking them.
The considerable profits that Vertex has raked in over the years continue to be put to good use to fuel the growth of its promising pipeline of prospective candidates, both within and outside of the cystic fibrosis treatment space.
One of the candidates to watch right now -- and which management thinks will be the company's next commercialized product -- is exa-cel, which treats sickle cell disease and transfusion-dependent beta thalassemia. Not only has the drug been hailed as a prospective one-time functional cure for these rare blood disorders, but management has said that its initial addressable market alone would total 32,000 lives.
NASDAQ: VRTX
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Vertex is also working on another cystic fibrosis therapy with Moderna, specifically for patients who can't take its existing cohort of CFTR modulators.
Another potential blockbuster in Vertex's pipeline is VX-548, its non-opiod drug candidate for acute pain ailments. In the fourth-quarter 2022 earnings call, CEO and President Reshma Kewalramani noted that "if approved, VX-548 would represent the first new class of pain medicine in decades with the potential to address the staggeringly high unmet need in acute pain. VX-548 acts on the peripheral nerves to block the pain signal, and thus may be able to provide effective pain relief without the abuse potential, which is a central nervous system phenomenon."
Bear in mind, Vertex Pharmaceuticals' portfolio of approved drugs (Trikafta, Symdeko/Symkevi, Kalydeco, and Orkambi), all of which treat cystic fibrosis, brought in $9 billion in revenue and $3.3 billion in net income in 2022 alone. These figures represented increases of 18% and 42% from 2021. Vertex ended the year with $11 billion in cash and investments on its balance sheet.
The company is coming from a position of superior financial strength. Its advantage within its core operating market paired with the potential of its pipeline present an opportunity that healthcare investors may he hard-pressed to overlook.
2. Shopify
Shopify (SHOP +8.30%) is continuing to record business wins in a challenging operating environment. The stickiness of its platform and core business model remain a draw for anyone with just about any level of experience to launch and grow a brand. While the company is not profitable right now, revenue is growing steadily and management has made it clear that a return to profitability is a priority for the future.
However, what the company is putting at the forefront right now is the growth of its business, which has involved a series of aggressive investments in the tools and solutions it offers to merchants. In building out that foundation for the future, management appears confident that this can lay the groundwork for a move back to profitability. And if you look at where Shopify is focusing its investments, this makes sense.
One of the most obvious examples was its purchase of e-commerce fulfillment company Deliverr last summer, which Shopify has been working to integrate with its existing fulfillment capabilities. Even though it's still early days for the company's new-and-improved fulfillment network, President Harley Finkelstein said in the 2022 earnings call that as of the final quarter of the year the company was already noting a 40% surge in orders per merchant on a year-over-year basis.
Better fulfillment solutions is how merchants retain more customers, and a key factor that can induce merchants to stay with Shopify over a competitor's platform.
NASDAQ: SHOP
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The company also launched a new initiative called Shop Promise last year, described as "a consumer-facing badge that provides reliable and accurate delivery dates across the merchant's online store, check out, and on the shop app." This seemingly simple branding tool had already resulted in participating merchants seeing as much as a 25% jump in conversion rates as of the end of 2022.
Another key event for the company in 2022 was the launch of its merchant-of-record product, Shopify Markets Pro, designed to make cross-border selling easier than ever. Even though this product isn't yet available to all of Shopify's merchants, management said in the fourth-quarter 2022 earnings call that the initial rollout of the product had seen cross-border customer conversion rates improving by as much as 36%.
Shopify hit just shy of $200 billion in gross merchandise volume (GMV) processed on its platform in 2022, which was more than 3 times higher than its GMV in the pre-pandemic year of 2019. And as of the end of 2022, Shopify had grown its share of the multitrillion-dollar U.S. e-commerce market to a notable 10%.
For investors willing to navigate the near-term choppiness of the markets -- which may worsen for a time if a recession does happen -- and the near-term impact that could have on Shopify, the long-term view for this business still looks incredibly promising, a fact that may drive some investors take even a modest position in this top growth stock.
