There are plenty of stocks that have turned a meager sum into six figures or more over the last 30 years. It can seem a daunting task to figure out what the next wealth-building stock is going to be, but I have found that the signs of tomorrow’s great companies are always in plain sight.
Multibagger stocks usually show two essential traits: fast revenue growth and an enormous addressable market to grow into. Three stocks that are demonstrating both characteristics right now are…
Dominating a $600 billion market
Wayfair stock has climbed 294% since its IPO in 2014. The online home-goods store has consistently increased revenue by 40% or more. That sky-high growth is indicative of the massive opportunity in front of the company, where the total home-goods market is estimated at $600 billion.
The company is spending heavily on logistics, technology, and marketing, which has paid off with the company taking a significant share of the spending starting to shift online in home goods. While home-goods sales across the industry are growing at a snail’s pace at physical stores, online sales are rising around 15% per year. Wayfair’s top-line growth rate of 40% or more in recent quarters suggests the company is taking a significant share of that market.
How is Wayfair doing that?
Management believes it possesses a competitive advantage because of its infrastructure, which is specifically designed to handle shipments of large, bulky furniture that big-box retailers are not equipped to deal with efficiently. Throw on top of that a slick online shopping experience, in which Wayfair prides itself on its exceptional customer service and helping buyers find the right look for their home, and you have a company that is tearing up the home-goods market.
As long as Wayfair continues to excel in this way, it should continue to grow for many years. Sometimes companies that fill a niche within a large industry, like Home Depot, can deliver huge returns for shareholders. I believe Wayfair could be one of those stocks.
Revolutionizing everyday money management
The growth in the mobile payment market promises big gains for investors, given that the global market for mobile payments is expected to grow 33.8% annually, according to Allied Market Research. Square is a leader in providing point-of-sale solutions at checkout for merchants, and its Cash App is the most downloaded peer-to-peer payment app in the app store. The stock has risen a staggering 479% since its IPO in 2015.
Revenue has increased nearly four-fold since 2014 to…
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