It can be tough for investors to keep calm amid the barrage of headlines regarding the trade war, tariffs, and other macro headwinds. However, long-term investors — those who think in terms of decades instead of quarters — should tune out that noise and focus on buying high-quality companies with plenty of room to run.
Today, I’ll discuss three growth stocks that could be worth holding for half a century or more…
China’s e-commerce and cloud leader
Alibaba’s Tmall and Taobao marketplaces make it the top e-commerce player in China. It also owns the country’s largest cloud platform and an expanding ecosystem of digital services, including the video streaming site Youku Tudou, the music streaming platform Alibaba Music, and the UC web browser. It’s also one of the top makers of smart speakers in China.
Alibaba generated 87% of its revenue from its core commerce unit last quarter. That business is Alibaba’s only profitable unit, and supports the ongoing expansion of its ecosystem against rivals like Tencent and Baidu. Analysts expect Alibaba’s revenue and earnings to rise 29% and 26%, respectively, next year, which are stellar growth rates for a stock that trades at 20 times forward earnings.
China’s middle class is expected to hit 550 million by 2022, according to McKinsey & Company, and continue growing over the next few decades. As China’s top e-commerce and cloud company, Alibaba should profit from that growth as consumers buy more products online and companies rely more heavily on cloud platforms.
That’s why Alibaba remains one of the best growth stocks to buy and hold over the long-term, and why investors should accumulate more shares on any trade war-related dips.
A niche leader in mobile apps
Twilio’s cloud platform processes calls, text messages, videos, and other content from app developers. In the past, developers built those features from scratch — which was often buggy, time-consuming, and tough to scale. Today, developers simply outsource those features to Twilio’s platform with a few lines of code.
Twilio’s first mover’s advantage in this market attracted a lot of major customers, including Airbnb, Lyft, and Twitter. Its ecosystem is also sticky, since it keeps cross-selling new services and it’s tough for customers to migrate their apps to another platform. That’s why Twilio’s dollar-based net expansion rate, which measures its revenue growth per customer, has remained comfortably above 100% ever since its IPO three years ago…
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