For more than a year, investors have enjoyed a historic bounce-back rally. After watching the benchmark S&P 500 lose more than a third of its value last year in under five weeks, they’ve seen the widely followed index deliver gains of 85% since the March 23, 2020, bottom.
But even with the market ending this previous week at a new all-time high, bargains still abound. The secret to generating big-time returns in any environment is to buy unstoppable businesses that offer clearly identifiable competitive advantages. Each of the following five unstoppable stocks perfectly fits that description and can deliver 500% or greater returns this decade.
With people stuck in their homes through most of 2020, many looked online for engagement. This included Pinterest, which added 124 million net monthly active users (MAU) last year, up 37%. But keep in mind that Pinterest had grown its MAUs by an annualized average of 30% in the three years (2017-2019) before the pandemic. While people staying home gave the company a boost, the platform was already resonating with users well before the pandemic.
Pinterest should also generate enormous revenue growth from its international users. Of the 124 million net new MAUs added last year, over 90% hailed from outside the United States. The downside of this distribution is that average revenue per user (ARPU) is markedly lower outside the U.S. On the other hand, Pinterest has an opportunity to double international ARPU many times over, which will sustain its double-digit growth rate.
As one final note, don’t overlook Pinterest’s role as an e-commerce platform. With its users willingly posting about the products and services they like, Pinterest simply needs to connect merchants that specialize in these interests with these potentially motivated shoppers.
Another disruptive company that appears to have unstoppable qualities is technology-driven real estate stock Redfin (NASDAQ:RDFN).
To state the obvious, Redfin has been a clear beneficiary of historically low mortgage rates. But the red-hot housing market that’s ensued as a result of record-low rates is far from the only reason to be excited about this company.
One of the ways Redfin helps to differentiate itself from the competition is by offering considerably lower listing fees. At Redfin, commissions tend to range from 1% to 1.5%, which can be as much as 2 percentage points lower than traditional real estate companies. Considering that home prices are rocketing higher at the moment, the savings that Redfin can offer sellers on commissions are amplified.
What’s more, Redfin’s personalized services have the potential to transform the buying and selling process. Even though it’s only offered in select cities at the moment, RedfinNow allows people to sell their homes directly to Redfin for cash, which removes the hassles that often accompany selling a home. Redfin also offers packaged services to handle appraisals, home inspections, and title paperwork. It looks to be well on its way to becoming a real estate juggernaut.
Want to invest in a trend that pretty much never has a down year? Consider putting your money to work in companies that are focused on companion animals, such as animal health insurance provider Trupanion (NASDAQ:TRUP).
According to the American Pet Products Association, year-over-year U.S. spending on pets hasn’t declined in at least a quarter of a century, and it’s slated to hit almost $110 billion in 2021. Included in this total is an estimated $32.3 billion in spending on veterinary care and product sales. Suffice it to say, American households love their pets like family, and they’re…