The second round of economic stimulus checks will soon be in the hands of many Americans. Direct deposits can reach bank accounts starting this week, and paper checks and debit cards will be mailed shortly thereafter.
An additional $ 600 will help many people pay bills or increase their emergency funds. Those are absolutely the top priorities for your stimulus money. After addressing these crucial items, investing for the long term is a great way to use the added money. If you plan to invest your stimulus check, here are three of the best stocks to buy at the moment.
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1. Etsy
Probably the most important thing to know about Etsy (NASDAQ: ETSY) is as follows: 88% of shoppers claim that the online e-commerce site has items that they cannot find anywhere else. The Etsy platform connects 69.6 million active buyers with 3.7 million active sellers in a market for exclusive handmade products. And those numbers are growing.
Etsy’s stock has risen close to 300% so far in 2020. This impressive performance was driven in part by the COVID-19 pandemic, with mask sales increasing revenue significantly in the second and third quarters. During the two quarters, the company also reported an influx of millions of new customers and recurring customers who had not made purchases in over a year.
This impulse is unlikely to evaporate after the pandemic ends. Etsy found that buyers increased their spending by more than 50% year over year in the third quarter, excluding purchases of face masks. Customers simply like the platform and are buying more products on it.
Etsy has just begun to scratch the surface of his complete opportunity. The company estimates it has a 5% market share in the $ 100 billion “specialty” retail market. But the pandemic has made management realize that its real market is much larger. With its tremendous growth prospects and laser focus on serving buyers and sellers, I think Etsy should generate huge long-term returns for investors.
2. Fiverr
Like Etsy, Fiverr (NYSE: FVRR) is an e-commerce company. But instead of connecting buyers and sellers of handmade products, Fiverr connects freelancers and companies for digital services.
Its stock was hot in 2020, shooting more than 730%. CEO Micha Kaufman said the company is benefiting from “sustainable business trends that increase its investments in digital transformation and its increased willingness to embrace a remote and flexible workforce”.
The company estimates its addressable market to total $ 115 billion. Fiverr expects to make close to $ 187 million in revenue in 2020, well below 1% of that addressable market.
Capturing more of that market shouldn’t be a problem. The workplace is becoming a place where teams work digitally from anywhere. Fiverr is rapidly expanding into new markets, most recently launching its platform in Brazil and Mexico. My opinion is that this action will probably be a big winner for a long time.
3. Innovative Industrial Properties
A real estate investment fund (REIT) may seem tedious compared to the excitement generated by Etsy and Fiverr. But Innovative Industrial Properties (NYSE: IIPR) it is not an ordinary REIT.
The IIP focuses on the medical cannabis industry in the United States. It provides a valuable service for medical cannabis growers who face challenges to raise capital due to restrictive federal laws. IIP buys the properties of these companies and then rents them back to them. These sale-leaseback transactions provide medical cannabis operators with the much needed cash and provide the IIP with a good long-term revenue stream.
The medical cannabis market in the U.S. is growing like a weed (sorry for the pun). Two states voted in November to legalize medical marijuana, bringing the total number of states where medical cannabis is legal to 35. IIP currently has 66 properties in 17 states. Many of these markets are still in their early stages and continue to show robust growth.
IIP’s shares jumped more than 130% in 2020. I think that could double – or more – in the new year, as the company adds more medicinal cannabis properties.