Is it time to reload your portfolio with some new picks? That's easier said than done right now. After all, many of yesterday's most popular and promising names have grown to the point where they aren't so promising anymore. It's time to consider a new slate of prospects. That means doing a bit of homework to figure out which companies face the brightest futures from here.
Here's a rundown of three of your best bets right now if you've got $1,000 in idle cash you'd like to put to work sooner rather than later.
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1. Shopify
There's no denying Amazon largely shaped the North American e-commerce industry it now dominates. As could have been expected though, its sheer size has become as much of a liability as it is an advantage. It now directly competes with its own third-party sellers, for instance, while it's struggled with fake product reviews and counterfeit goods that it can't properly police. Brands are understandably looking for alternative sales channels.
Enter Shopify (SHOP 3.06%).
Simply put, Shopify lets brands and businesses of all types and sizes establish and operate their own online store, directly serving customers without the need for a middleman like Amazon. Not only does this arrangement allow sellers to cultivate their own digital relationships with consumers, but it also allows brands to offer the authenticity and storytelling that customers crave -- authenticity that just can't exist with a massive online mall. To this end, Shopify facilitated the sale of $292.3 billion worth of goods and services last year, up 24% year over year, and generated $8.9 billion in revenue for itself. Of that, nearly $1.6 billion was turned into free cash flow, and $1.1 billion worth of operating income.
Data by YCharts.
That's still just the beginning though, as the e-commerce landscape continues to mature and consumers continue becoming a bit pickier about how and where they shop online. The analyst community expects Shopify's top line to grow on the order of at least 20% per year for the next three years, pumping up profits at an even faster rate.
This stock's not performed particularly well since late last year, for the record, rattled by the lingering unpredictability of the uneasy economic environment.
Just take a step back and look at the bigger picture. Even with a couple of disappointing quarterly reports and lackluster guidance, the company's still making strong forward progress. Shares will eventually reflect this growth. It's just going to take some time. In the meantime, this weakness is a buying opportunity.
2. CRISPR Therapeutics
Investing in well-established biotech stocks is difficult enough. It's even trickier when the company in question is built around a young biotechnology. It requires not only an understanding of a new science, but a feel for how marketable that science will be. That's a big reason CRISPR Therapeutics (CRSP 2.33%) shares have been so hot and cold for the past several years -- the market can't decide what the organization's future holds.
As with Shopify, though, take a step back and look at the bigger picture here.
The premise of CRISPR's core science is easy enough to embrace, even if its intricacies are difficult for the average person to understand. One of the company's co-founders co-developed a technique for repairing damaged DNA. This so-called CRISPR (clustered regularly interspaced short palindromic repeats) science has since been successfully used to create one drug approved for sale. That's Casgevy, for the treatment of sickle cell disease and beta thalassemia. Its versatile potential is enormous though, particularly on the cancer front, where a cell's genetic code is damaged but can't fix itself as it normally would. Industry research outfit Precedence Research believes the global CRISPR-based gene-editing drug market could grow from less than $5 billion this year to more than $13 billion by 2034, led by CRISPR Therapeutics' biotechnology that's also showing strong promise as a treatment for diabetes and muscular dystrophy. All told, the company's got five clinical trials underway, along with several more preclinical studies.
So why has the stock been so hit-and-miss since peeling back from its 2020 run-up to its 2021 peak? That's nothing unusual for a biotech ticker. Investors often get ahead of themselves when a biotechnology company's first drugs start seeing real potential for their first approval. That bullish euphoria's faded in the meantime, but the company's prospects have never been more compelling.
This might help: The analyst community's current consensus price target of $77.21 is about 75% above this stock's present price.
3. Confluent
Finally, add Confluent (CFLT 2.11%) to your list of the best stocks to buy if you've got $1,000 -- or any other amount of money -- to work with at this time.
One of the proverbial double-edged swords of living in the computer age is the ability to create as well as analyze mountains of digital data. The advent of data storage, artificial intelligence, broadband connectivity, and real-time automated communication of course only makes it easier to overwhelm ourselves. Indeed, there's more information now coming and going that actual people can't even process it all. Networks of computers are now necessary to handle it, but even then, it's not easy.
So what's Confluent's place in the matter? It offers data streaming solutions that make the constant flow of digital information a benefit rather than a burden. Or as the company puts it, its technologies allow its client companies to "build faster, scale smarter, and turn data chaos into instantly accessible and usable data products." Banks, retailers, and factories all utilize its platform. Walmart, for instance, leans on Confluent for real-time inventory replenishment. Credit card outfit Capital One uses Confluent's tech to constantly serve its 100 million-plus customers while simultaneously protecting them from fraud. Although it's not a household name (and probably never will be), there's a good chance you or someone in your household regularly benefits from Confluent's know-how.
Anyone keeping tabs on Confluent of late will likely know the stock hasn't really gone anywhere since its post-IPO pullback in 2022, raising concerns that it never will.
Just don't get too fixated on its past performance, particularly now that the company's profitable. Sales are expected to grow to the tune of nearly 20% per year over the course of the coming three years, extending a long-established trend, and pushing the company deeper into the black. The market won't ignore this forward progress forever, even if the stock is a bit expensive here.
