November 28, 2021
  • November 28, 2021

These 2 unstoppable actions have plenty of room to run

By on September 18, 2021 0

WWhat are the key attributes to look for when looking for stocks that have great potential for impressive long-term returns? First, start with the market leaders within their respective industries or regions. Such dominance is likely to go unchallenged, and the incumbent can then continue to grow faster than the rest of the pack.

Second, look for companies that are hanging on to long-term trends or have catalysts that can propel their earnings and net income up over time. With trends like these acting like a tailwind, the business can quickly reach greater heights. The beauty of owning such stocks is that your wealth will also multiply over the years due to the ever increasing share price.

Here are two stocks that have both attributes: they are leaders in their field and also have many avenues for future growth.

Image source: Getty Images.

Netflix

Netflix (NASDAQ: NFLX) is undoubtedly one of the early pioneers and market leader in the streaming TV industry. The company started in 1997 as a mail order DVD rental service, but has now grown into a streaming giant with over 200 million paying members. Over the past five years, from 2016 to 2020, Netflix has grown revenue from $ 8.8 billion to $ 25 billion, while net income has grown from just $ 187 million to $ 2.76 billion. . During the same period, membership has more than doubled from 81 million to 209 million in the current quarter.

The company has invested in and expanded its original line of movies and TV shows to gain the liking of customers. It now has an impressive library of titles in several genres and regions. It has already spent $ 8 billion on content creation in the first half of 2021 and has a roster of new titles for the second half that is expected to continue to excite. Netflix has enough leverage to keep other new entrants at bay, including solid names like Walt disney and Amazon. The market pie is big enough for all streaming players to coexist and grow their subscriber base and profits in tandem.

Netflix intends to expand into gaming as a separate revenue stream and will treat it as another of its content categories. The initial focus will be on games for mobile devices and will be bundled with subscriptions.

Limited sea

Limited sea (NYSE: SE) is a Singaporean technology company with three main divisions: digital entertainment under Garena, e-commerce under Shopee and digital payments under the SeaMoney brand. The company has grown in leaps and bounds as it expands its reach across Asia and Latin America, with impressive numbers that offer a tantalizing glimpse of what’s to come.

Group revenue for its second quarter of fiscal 2021 more than doubled year over year to $ 2.3 billion, while gross profit more than quadrupled year over year to the next to reach $ 930.9 million. Popular self-developed sea’s Free fire the game has recorded over a billion downloads on Alphabeton Google Play and continues to be the top grossing mobile game in Southeast Asia, Latin America and India. Quarterly paid users increased 85% year on year to 92.2 million, and the division’s esports event in May drew 5.4 million online viewers.

Sea Limited’s e-commerce division is also making inroads into new regions, with expansion plans in India and Poland. The division’s revenue jumped to $ 1.2 billion, up 160.7% year-over-year, while the gross value of merchandise jumped 87.5% year-to-year. the other to reach $ 15 billion. Gross orders more than doubled for the platform to 1.4 billion.

The company recently raised $ 6.3 billion through a stock offering and also intends to raise an additional $ 2.5 billion in equity-linked debt, all to fund further expansion. . Sea Limited aims to gain market share in new markets and will also invest in new games to capture a wider audience. It looks like the company’s momentum is set to continue as investors have offered their shares to an all-time high of nearly $ 350.

10 stocks we like better than Netflix
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of the board of directors of The Motley Fool. Suzanne Frey, an executive at Alphabet, is a member of the board of directors of The Motley Fool. Royston Yang owns Alphabet shares (A shares). The Motley Fool owns shares and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Netflix, Sea Limited and Walt Disney. The Motley Fool recommends the following options: January 2022 long calls at $ 1,920 on Amazon and January 2022 short calls at $ 1,940 on Amazon. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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