If you have invested in Amazon shares 10 years ago and kept in their shares, the value of their position would have grown by about 1,660%. An investment in Netflix the shares would have generated a return of 1,720% in the same stretch. There are other excellent companies that have recently delivered even better returns. E-commerce service provider ShopifyThe company’s shares have risen more than 4,480% in the past five years, for example.
You will not always buy a stock at the best price, but supporting large businesses that have sustainable advantages in growing markets will help you make big gains. With that in mind, read on to see two companies that have what it takes to crush the market in the long run.
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1. Group game
Match Group (NASDAQ: MTCH) is a leader in the dating app market. Although its main application, Tinder, accounts for most of its revenue, the company’s corporate umbrella also includes dating services Hinge, Match, Plenty of Fish and OkCupid. No competitor has a greater reach in the American and European markets, and it seems that the company’s growth story is just beginning.
The coronavirus pandemic has made it more difficult for companies to add paying users, but Match has still managed to record impressive growth. Fourth quarter revenue increased 19% year-over-year, to $ 651 million, and the average monthly subscribers increased 12%, to 10.9 million.
In a year that was marked by serious challenges related to the pandemic, Match still managed to increase its revenue by 17% to reach US $ 2.4 billion. Sales growth came just below the 19% annual increase the company posted in 2019, but Tinder still stands as the highest grossing non-video game app in the world, and it’s clear that there is still a lot of momentum behind the company’s business.
Match has a command leadership in the dating space thanks to its diverse collection of apps. Tinder accounted for about 58% of the company’s revenue last year, but there is value in addressing the company’s ecosystem. The technological advances made for a platform can be shared between applications, and the strong growth of the Hinge application, in particular, is showing that Match has real opportunities outside of Tinder. The company also has great room for growth in international markets and recently announced that it would spend $ 1.7 billion to acquire South Korean social media company Hyperconnect.
The dating app market is still relatively young. Bringing more members on board and increasing the average revenue per user should result in big profits over time. The growth of the online dating market seems like a pretty safe bet, and Match has a good chance of maintaining a leading position in the category.
2. Activision Blizzard
After going through a difficult phase in late 2018, Activision Blizzardin (NASDAQ: ATVI) the stock price came back booming. The video game maker operates a success-dependent business, and the lack of major new franchise launches, combined with the declining performance of some properties, has meant that its growth has slowed for a brief period. However, strong sales to the company Call to action series on console and PC platforms and the launch of an extremely popular mobile version of the franchise helped change his fortunes.
In addition to Call to action, Activision Blizzard also produces successful franchises, including World of Warcraft, candy Crush Saga, Diablo, and Overwatch. Following the incredible success of Call of Duty: Mobile, the administration seems totally committed to combining more of its intellectual properties with smartphones and tablets. There is great potential there.
Activision Blizzard also has a large catalog of titles that are ready for monetization. The publisher has already had considerable success with game remakes in the Tony Hawk, Crash Bandicoot, and Spyro the Dragon franchises, and there’s still a lot of untapped content in the company’s library to work with. This approach to monetizing older games has been a huge success for Nintendo in recent years, with video game re-releases generating strong unit sales and margins on its Switch hardware, and Activision should be able to do more on that front.
While the natural progression of video game product life cycles means that the company’s performance tends to be somewhat erratic, Activision Blizzard has generally done a great job of launching and maintaining long-lasting properties. The game publisher will continue to play a leading role in shaping the future of interactive entertainment, and its stock looks set to deliver long-term wins.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even our own – helps all of us to think critically about investing and making decisions that help us become smarter, happier and wealthier.