Finding stocks that generate life-changing returns is not that difficult to do — they are often brands that you already know. The challenge is having the courage to step up to the plate and stick with those stocks through thick and thin, because even great stocks will experience periods of high volatility.
Stocks that go on to generate monster returns are usually the companies that are right in front of you. Three examples are Apple, Netflix, and Amazon. A $1,000 investment in each of these stocks at the beginning of 2005 would be worth a total of $287,400 today.
The interesting thing about these stocks is that Apple and Amazon were already large-cap stocks in 2005 but still climbed 1,780% and 3,850%, respectively, over the last 14 years. Monster stocks don’t have to be small growers but can be found among fast-growing leaders.
With that in mind, here’s why…
The mobile game market is exploding
After a few years of struggling to gain its footing, Glu Mobile finally took off in 2018. The mobile game company just reported its fifth consecutive quarter of improving operating income, driven by an increase in revenue of 18% year over year in the first quarter.
The stock was riding high through April but plunged from its highs after the company’s first-quarter earnings results. Even though the company beat analysts’ expectations, management’s guidance for the second quarter was lower than expected. But the market is losing sight of the long-term upward trajectory for the company and the increasing popularity of mobile gaming.
Glu’s three core games — Design Home, Covet Fashion, and Tap Sports Baseball — grew adjusted revenue a combined 30% year over year last quarter, and the company has three promising games releasing in the coming months — WWE Universe, Diner DASH Adventures, and Disney Sorcerer’s Area — which management believes will keep the company squarely in growth mode.
Investors can buy a share of Glu Mobile for a forward P/E of 20 times this year’s earnings estimates. That’s not a bad deal for a company that is seeing growing revenue and free cash flow and is serving a $63 billion mobile-game market that is growing at a double-digit rate.
Spotify is a powerhouse in the growing music streaming market, with 217 million monthly active users and 100 million subscribers around the world. The stock is up only 8% since its IPO last year, as concerns about profitability and competition weigh on the shares. But I believe these concerns are overblown.
Apple Music reportedly surpassed Spotify in subscribers in North America in recent months, but that didn’t stop Spotify from growing subscribers by an impressive 32% year over year in the first quarter. That growth in the face of competition reveals how massive the long-term growth opportunity is for the company.
Spotify is already a well-known brand in the music streaming market, but the company has lofty ambitions to be much more than your favorite playlist…
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