The stock prices of many companies soared last year, as investor sentiment became optimistic that the economy could come back to life as soon as the coronavirus pandemic is over.
But in early 2021, some investors wonder which companies will still be good long-term investments after Wall Street’s recovery last year. See why it might be a good idea to invest $ 1,000 in Roku (NASDAQ: ROKU), Amazon (NASDAQ: AMZN)and Square (NYSE: SQ) right now.
1. Roku: A healthy flow of growth
Roku has become a household name in recent years, as the number of active accounts using the company’s streaming platform has grown from 6 million in 2014 to 46 million in the third quarter of 2020.
Image source: Getty Images.
Roku’s video streaming platform, which is found on its streaming devices and embedded in many smart TVs, is not married to any streaming service, which means it benefits regardless of who is winning the streaming war. Be it Netflix, Disney+, ATTfrom HBO Max, Apple TV +, or any new service that appears in the future.
In addition to Roku’s phenomenal ability to enter millions of families in recent years, investors should consider how the company is taking advantage of the fast-growing cable cutting trend. Last year, about 6 million people canceled their traditional pay TV services, many of them opting to set up streaming services. Many people are leaving traditional pay TV, but consider that by 2024 more than a third of Americans will follow suit.
Roku’s shares have risen 224% in the last 12 months, but considering that we are still seeing a mass migration from pay TV to streaming services and the fact that Roku is the leading video streaming platform for these services, I think There are many opportunities for this action to surpass the market in the coming years.
Image source: Getty Images.
2. Amazon: The e-commerce wave is just beginning
Blockages and social distance increased e-commerce sales last year and Amazon’s business has grown tremendously because of that. The company’s sales in North America increased 37% and diluted earnings per share rose 68% in the first nine months of 2020. Amazon had to hire 400,000 new employees just to keep up with growing e-commerce demand.
With a handful of COVID-19 vaccines already being distributed, at least part of the intense demand for e-commerce is likely to slow by the end of 2021. But investors should not think that demand will decline significantly.
E-commerce has certainly been accelerated by the pandemic, but instead of being just a temporary increase, it is more likely that the event has convinced many e-commerce strongholds that online shopping is here to stay. A McKinsey survey estimates that 70% of consumers plan to continue, or even increase, their online shopping once all restrictions on social distance are lifted.
In the first nine months of 2020, only 14.5% of all U.S. retail sales were online, which means that there is plenty of room for online shopping to continue to expand. As the leading e-commerce platform in the United States, Amazon is likely to have some of the biggest benefits as this market continues to grow.
Image source: Getty Images.
3. Square: an action that is directly on the fast track
If you haven’t been following the tech industry in recent years, you may not know much about Square. The company is a payment processing platform whose point of sale terminals are popular with many small businesses and whose Cash App is a leading point-to-point payment mobile application.
Square is taking advantage of the massive shift from physical to digital payments and is already experiencing phenomenal growth as it moves further into this market. Digital payments are estimated to be worth $ 2 trillion in 2025, and Square could not be better positioned to take advantage of this.
The company’s Cash App has 30 million monthly active users and its features have expanded beyond just point-to-point payments. For example, users can now buy and sell stocks (and even cryptocurrencies like bitcoin) within the app. The number of active Cash App users is also increasing. In the third quarter, the number of daily active customers with Cash App transactions almost doubled over the previous year, according to Square.
Square is a purchase for the same reasons that Amazon looks like a purchase now. E-commerce is growing rapidly and there is probably no going back, even when the pandemic is over. And as more people look for easy and convenient ways to pay merchants in stores, and pay each other, Square’s digital payment platform is likely to thrive.
A final thought
The stock market has been in shambles since March 2020 and its huge bullish run in the face of economic uncertainty, a pandemic and political instability has been little more than a little confused. There is no guarantee that 2021 will bring the same market growth as last year, but long-term investors should not worry about that. Buying and holding these companies for at least five years should help you to overcome any slump that may arise and allow your investments to overtake the market.