When you're investing in companies instead of trading stocks, the daily or weekly movements of the market shouldn't concern you. That's because your focus is on buying into great businesses that can stand the test of time and letting them gradually compound your portfolio gains.
That stock-buying philosophy has been put to the test over the past few years. Plenty of great companies got caught up in the volatility brought on by the pandemic and its aftereffects. It's been hard not to question your investing decisions. But that just means it's more important than ever to make certain that the stocks you buy align with your risk tolerance and portfolio objectives. That especially holds true if you only have a limited amount of capital, say $1,500, to invest.
If you've got $1,500 available that isn't needed for monthly bills, to pay down short-term debt, or to bolster an emergency fund, you might consider investing it in two great stocks that can grow that initial investment into a real long-term nest egg.
1. Shopify
Shopify (SHOP 1.11%) is dealing with dynamics in the global e-commerce industry that remain more challenging than in earlier periods of the pandemic. Still, global e-commerce sales that are projected to surpass $6 trillion this year are on track to hit more than $8 trillion annually by the end of 2026. So the potential for growth is still there and Shopify is ready to take advantage of it.
About one-fifth of all e-commerce sites globally are built on Shopify's platform. In an increasingly competitive landscape, Shopify continues to introduce new tools and services for merchants while capitalizing on the fact that artificial intelligence (AI) is seeing rapid adoption and increasing use cases across a range of industries, including e-commerce.
Shopify just introduced an AI-powered chat interface called Sidekick as part of a new suite of AI features known as Shopify Magic. Shopify President Harley Finkelstein offered details on this in the company's second-quarter earnings call:
Unlike other generative AI products, Shopify Magic is specifically designed for commerce. And it's not just embedded in one place, it's embedded throughout the entire product. So, for example, the ability to generate blog posts instantaneously or write incredibly, high-converting product descriptions or create highly contextualized content for your business. That is where we feel like AI really can play a big role here in making merchants' lives better.
Shopify also just announced that it is teaming up with Amazon and effectively integrating its Prime services with Shopify's checkout technology. Prime subscribers (over 160 million in the U.S.) will be able to seamlessly use Amazon's fast, free shipping network by selecting the "Buy with Prime" option when making purchases from participating Shopify merchants. This is the first time that Amazon Prime members will be able to capitalize on the benefits of Prime delivery outside of the Amazon ecosystem.
Shopify hit $55 billion in gross merchandise volume in the second quarter of 2023, a 17% jump from the prior year period. A notable $11 billion of that total was processed by the company's Shop Pay offering, a 37% increase from one year ago. Revenue for the three-month period rose 31% to $1.7 billion. Shopify also marked its third quarter in a row of generating positive free cash flow, which totaled $97 million for the three-month period alone.
At its current price, a $1,500 investment in Shopify would give you about 23 shares. Those shares will get you a leader in the fast-growing multi-trillion-dollar e-commerce industry. Shopify looks to have plenty of room to grow in the years ahead, even if consumer spending trends remain uncertain in the near term.
2. Intuitive Surgical
Intuitive Surgical (ISRG 0.59%) is known for being the leading developer and manufacturer of surgical robotics systems globally. It maintains a global market share hovering around 80%.
The company's surgical robotics systems are used in multiple types of minimally invasive procedures. However, sales of these products actually account for a relatively small slice of overall revenue and profits. The rest of Intuitive Surgical's top and bottom lines are attributable to sales of instruments and accessories that accompany these systems, as well as services that it sells, like customer support, training, and integrated software offerings.
In the second quarter of 2023, Intuitive Surgical brought in total revenue of $1.8 billion, up 15% from one year ago. Of that total, about $393 million was derived from system sales, while approximately $1.1 billion came from instruments and accessories revenue. The remaining $287 million was attributable to services revenue.
Surgeries utilizing the company's flagship da Vinci system rose 22% in the second quarter of this year from the same period in 2022. Part of the reason for the jump is that procedure volumes took a hit last year due to COVID-19 resurgences in key Asian markets. Still, looking over a longer span of time, da Vinci procedures witnessed a healthy compound annual growth rate of 17% between the second quarter of 2019 and the second quarter of 2023.
Intuitive Surgical closed out the second quarter of 2023 with 8,042 of its da Vinci surgical systems installed globally. That is 27% more than its installed base of systems at the end of the same quarter just two years ago.
Intuitive Surgical has a lengthy history of raking in profits. Its net income in the second quarter of 2023 totaled $421 million, up 37% from the year-ago quarter. Over the trailing 12 months, the company has brought in profits of about $1.4 billion.
Intuitive Surgical has maintained a chokehold on the surgical robotics market for more than two decades and counting. The company dominates a market that is not only in demand but expanding as the adoption of surgical robotics grows for both minimally invasive and traditional open surgeries.
At its current price, a $1,500 investment in this healthcare stock would give you about five shares. Even a small position in this healthcare giant could reap rewards for investors in the years to come.
