$ 10,000 invested in these growth stocks could make you a fortune over the next 10 years
Of course, if you have $ 10,000 to invest, you want to do so wisely. If you want to generate above-average returns, you need to find growth stocks that have already proven themselves and whose business models indicate reasons for further growth.
Start with MercadoLibre (NASDAQ: MELI), modern micro devices (NASDAQ: AMD), and Seagate technology (NASDAQ: STX), Companies whose stocks have risen more than 10% this year and more than 100% in the last five years.
1. MercadoLibre is just getting started
MercadoLibre is often called the. designated Amazon In Latin America, it’s an e-commerce and fintech giant. Founded in 1999 as an Argentine company, the company is now represented in 18 countries in the region. Over the past five years, Mercado Libre has seen quarterly sales growth of 637% and stock growth of nearly 800%.
The company just closed its second quarter on June 30, reporting record sales and volume. MercadoLibre said it had net sales of $ 1.7 billion (numbers in USD) for the quarter, up 102.6% year over year. Also, the sales volume was $ 7 billion, up 46% over the same period in 2020.
The company was particularly strong in Argentina and Mexico, two countries where sales for the quarter rose triple-digit percentages year over year.
MercadoLibre also posted net income of $ 68.2 million, compared to $ 55.9 million for the same period last year. The growth in the number of COVID-19 cases in Latin America, while tragic, has increased the move to more e-commerce and online payment systems. Last year, an estimated 13 million people in Latin America made an online purchase for the first time.
The poor roads and difficult terrain make shipping products across South America expensive. In many ways, this offers MercadoLibre a ditch for new entrants in the region, such as Amazon. The company, whose shipping division is known as Mercado Envios, bought Kangu, a Brazilian logistics company that operates in Brazil, Colombia, and Mexico, and gave it more delivery vehicles and staff in key countries. The transaction closed in August for an undisclosed amount.
What makes MercadoLibre a great long-term stock is that it is only scratching the surface of the possibilities of e-commerce in South America. A report by OMR Global puts the average annual growth rate (CAGR) for e-commerce in the region over the next six years at 25.6%. That makes it a stock with long-term potential that investors can buy.
2. Advanced Micro Devices has a bright future
The demand for semiconductor chips has gone through the roof since the pandemic began. Primarily, there has been an upswing in the company’s central processing and graphics processing units. Several factors have driven this increase, the adoption of 5G, the growth of cloud computing, and increased purchases of laptops and tablets. These things will likely be around long after the pandemic.
The CAGR for the global semiconductor market is projected to be 8.6% over the next seven years, growing to a market of $ 803.15 billion over that period, according to a report by Fortune Business Insights. This is great news for Advanced Micro Devices (AMD) investors. The stock is up more than 15% over the year and 1,520% over the past five years.
The company has posted double-digit sales growth for seven consecutive quarters. The company’s second-quarter report said it had sales of $ 3.85 billion, up 99% year over year. Gross income was $ 1.83 billion, up 116% year over year and 15% more than the first quarter of 2021. Net income was reported at $ 710 million, an increase of 352% over the same period in 2020. The company expected sales in 2021 to have increased by 60% compared to 2020. In addition, the company reported its highest free cash flow of $ 888 million for the second quarter, up from $ 152 million for the same period in 2020.
The company is also using its additional cash to add value to shareholders and fuel more growth. In May, the company launched a $ 4 billion share buyback program. And the company said it is on the right track with its $ 135 billion acquisition of Xilinx, known for the production of programmable logic components, by the end of the year. The Xilinx deal is designed to help AMD compete better Intel in the data center of his business running digital applications.
Probably the biggest advantage of AMD is that semiconductors are expensive to manufacture. This has to be done in sterile environments with state-of-the-art machinery, and the science of microchips is changing so rapidly that it is difficult for new companies to catch up with market share. That’s a great dig for existing chip makers, especially AMD.
3. Seagate technology leads the way in the cloud
Seagate Technology is a global leader in data storage, making portable hard drives and external SSD drives essential for laptops and cloud computing. The company’s stock is up more than 38% this year and more than 106% over the past five years.
On July 2, the company closed its fiscal year 2021 and all numbers were above those of the previous year. Annual sales were $ 10.6 billion, an increase of 1.6% over the previous year. While the operating margin was 14% compared to 12.4% in 2020. Net income was $ 1.3 billion, up 30.8% from 2020. The company’s fourth quarter revenue of 3 billion The US dollar was the best quarter in six years.
The company signed a multi-year contract with last month Zoom video communication for the video conferencing company that enables Zoom customers to use Seagate’s Lyve Cloud platform to store meeting recordings. This helps Seagate’s business as it shows that a high profile customer is seeing the benefits of Lyve Cloud Storage-as-a-Service.
While Seagate stock hasn’t shown as much momentum as the other two companies mentioned here in the past three years, it appears to be catching fire this year. According to Seagate data, the rise of cloud computing has accelerated the need for mass storage devices. In 2015, 25% of the data was stored in the cloud. Until last year, 40% of the data was stored in the cloud. Certain trends, such as the rise of autonomous vehicles, smart factories, and human genome research, have increased the need for cloud computing.
Another reason to like Seagate stock is its low price, with a P / E ratio of just 15.46. It also has something the other two stocks don’t have: a dividend – and a generous one at that. The company increased its dividend 3% to $ 0.67 per share in October 2020, and the current yield is 3.18% on Wednesday’s share price. Despite all the evidence, this stock shows great potential in the changing world.
This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.