Although the year isn’t even halfway over, it’ll almost certainly be remembered as the year retail investors firmly asserted themselves on Wall Street. Since January, retail investors have effectively banded together to…
buy shares and out-of-the-money call options in stocks with very high levels of short interest. The intent of these retail groups is to effect a short squeeze — a short-term event that sees pessimists (short-sellers) run for the exit at once, causing a company’s share price to skyrocket — and send these stocks “to the moon.”
Unfortunately, nearly all of the companies retail traders have targeted have poor fundamental track records and/or frightening balance sheets. In short, these gains aren’t going to be sustainable.
If you want to own stakes in companies with a real chance of “going to the moon,” you have to buy into innovative businesses with tangible growth prospects. The following five supercharged stocks fit the bill perfectly.
Growth stock investors who are patient will likely watch Singapore-based Sea Limited (NYSE:SE) go to the moon over the next decade. That’s because Sea brings not one or even two, but three rapidly growing and differentiated operating segments to the table.
For the time being, Sea’s digital entertainment division is generating all of its earnings before interest, taxes, depreciation, and amortization (EBITDA). The company ended March with almost 649 million quarterly active gamers, 12.3% of which were paying customers. What’s notable is that the number paying customers jumped from 8.9% in the year-ago quarter to 12.3%.
However, the segment that’ll create far more long-term value is its e-commerce shopping platform Shopee. The most downloaded e-commerce app in Southeastern Asia saw gross merchandise value more than double to $12.6 billion in Q1 2021, with gross orders up 153% to 1.1 billion. Even though the ongoing pandemic is helping funnel consumers into online channels, it’s the rise of the middle class in emerging markets that’ll be responsible for Sea’s ascent.
To round things out, Sea also has over 26 million paying mobile wallet customers. Since it operates in a number of underbanked countries, offering access to digital financial services could be another game-changer for the company and its consumers.
By 2025, New Frontier Data has forecast more than $41 billion in annual U.S. weed sales. Like other multistate operators, Jushi is angling for its piece of this fast-growing pie. But it’s doing so a bit differently. Most of its revenue is expected to come from Pennsylvania, Illinois, and Virginia. Why these three states? The answer is they all limit the number of retail licenses they issue. This is to say that Jushi is going to face limited or nonexistent competition in these states, which’ll allow it to successfully build up its brand awareness and create a loyal following.
Jushi is also well capitalized and not afraid to make acquisitions to bolster its retail or cultivation presence. It boosted its presence in Pennsylvania and Virginia earlier this year and recently closed on the purchase of two dispensaries in California. The Golden State is the largest pot market in the world, by annual sales.
Most marijuana stocks are valued at anywhere between 3 and 7 times forward-year sales. As for Jushi, it can be…
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