It’s been an interesting year in the stock market, to say the least. After plunging into a bear market at record speed when the COVID-19 outbreak began, the S&P 500 has recovered and some more. You are sitting on a gain 16% with only a few days left in 2020.
However, many stocks performed much better, and this is especially true in financial technology, or fintech space. Here are three in particular who doubled investor money or more in 2020, but are still attractive as we move into 2021.
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3 Fintech shares that doubled investors’ money (or more)
I will not keep you in suspense. Here are three fintech stocks that generated 100% total returns (or, in some cases, much more) in the past year.
Data source: YCharts. Total returns for 1 year ended December 29, 2020.
A look at the performance of each company explains why these actions performed so well.
In the case of Square, its main payment processing business continued to perform well. The initial success of its Online Store omnichannel platform is also encouraging. However, the real story is Square’s Cash app, which doubled its user base last year. In addition, the company did a fantastic job of monetizing the platform with features like stock trading and cryptocurrency exchanges.
PayPal is in a similar situation. The online payments leader expects to add 70 million new net active accounts for 2020, doubling initial expectations. The company now has nearly $ 1 trillion in annualized payment volume flowing through its platforms, including Venmo, which now has 65 million active users and a 61% year-over-year payment volume growth rate.
Last, but certainly not least, eXp World Holdings, the disruptive real estate broker, has more than 35,000 agents on its platform. It is growing at a remarkable rate. Last year, the number of agents and brokers on the eXp platform grew by more than 56% and the volume of residential transactions closed by its agents increased 112% to $ 23.6 billion. As a result, eXp’s revenue and gross profit doubled year on year in the third quarter, and its cash flow almost tripled.
Are still good fintech stocks to buy now?
It is natural to wonder if a stock is still of good value after such performances. In all three cases, there may still be tremendous growth potential from here.
Square and PayPal still have a lot of potential to expand their core payment processing businesses. The pair currently processes about $ 100 billion and $ 1 trillion in annualized payment volume, respectively, but this is very small compared to the global $ 185 trillion payment market. In addition, Square is still in the relatively early stages of monetizing its Cash App, and PayPal has barely tapped into the revenue generating potential of its huge Venmo platform.
While eXp’s growth is certainly impressive, and more than $ 90 billion in annualized transaction volume may sound like a huge amount (and it is), it is still a relatively small fraction of the nearly $ 2 trillion in annual real estate transactions in USA. in Canada, the United Kingdom, Australia and South Africa too, therefore, its addressable market is considerably larger.
The bottom line is that these companies have emerged as big fintech winners in 2020, but there’s no reason to believe they won’t continue to win. All three are entering 2021 with incredible momentum and may still be smart additions to long-term investor portfolios now.