Forget Dogecoin: These are the smartest stocks to buy now
Investors have much to be thankful for over the past 11 months. Since hitting a bear market low on March 23, the benchmark S&P 500 and technology driven Nasdaq Composite reported 73% and 96%, respectively, through February 23, 2021.
Yet neither of the two numbers matches the returns seen in most branded cryptocurrencies. For example, Bitcoin, the largest digital currency by market cap, has gained nearly 620% through February 23 from the March 23 low for the stock market.
But even Bitcoin was left in the dust by a supercharged digital token: Dogecoin (CRYPTO: DOGE). Dogecoin has gained nearly 1,050% year-to-date and is up just under 2,000% on a rolling four-month basis.
Dogecoin: Everything barks, no bite
If you’re wondering how an asset can earn over 1000% in less than two months, look no further than the power of cult investing on retail boards like Reddit or social sharing platforms like Twitter. Similar to how the WallStreetBets community on Reddit banded together to grab the large sum of money seen in heavily shorted stocks, retail investors on Reddit’s SatoshiStreetBets board banded together and crowded together. in Dogecoin at an exceptionally low price. He even received the support of Tesla Motors‘CEO Elon Musk, who inflated the alt-coin via a series of tweets.
The problem is, Dogecoin was a joke from the start, and there’s nothing about its usefulness that will change that. It was created in a matter of hours in 2013 by two engineers who thought it would be fun to merge the two hottest things on the internet – cryptocurrency and a Shiba Inu dog meme – into one.
It can be bought and sold on some crypto exchanges, but its usefulness is very limited. That is, only a tiny percentage of businesses accept it as a form of payment.
In other words, it has all the characteristics of a pump and dump asset, with emptying occurring at some point in the future.
Throw Dogecoin and put your money to work in sustainable stocks
Instead of investing your hard-earned money in a digital joke, consider putting it to use in businesses that have tangible long-term growth prospects and offer good growth potential. Here are three of the smartest stocks you can buy right now.
If you really have an inevitable itch to gain cryptocurrency exposure, ancillary actions like the Payment Enabler MasterCard (NYSE: MA) would be a smart bet. MasterCard recently announced that it would start supporting a handful of cryptocurrencies on its network later this year.
However, the game-changing potential for Mastercard remains its cashless payment facilitation. Given that the majority of transactions globally are still done in cash, Mastercard’s track to expanding its payment network into underbanked regions of the world could lead to decades of high single-digit, low-double-digit growth. .
Mastercard’s operating model is also tied to the health of the US and global economy. When the US and global economy is growing, consumers and businesses spend more. Higher spending should make Mastercard, which is driven by merchant fees, more money. Since periods of economic expansion last much longer than contractions and recessions, Mastercard is play a numbers game that he is doomed to win.
Finally, Mastercard chooses to avoid lending and strictly focus on facilitating payments. While this may mean missing out on interest income and the potential for additional charges during long periods of economic expansion, it also means that there are no direct negative consequences during recessions with a increase in credit defaults and loans. Not having to set aside capital for loan and credit losses is one of the main reasons Mastercard’s margins remain so strong.
After years of maturing for the cannabis industry, a handful of marijuana stocks definitely worth buying now. Perhaps at the top of this list is the US Multi-State Operator (MSO) Cresco Laboratories (OTC: CRLBF).
Like most OSMs, Cresco has a retail presence. But as you are about to see, it is not necessarily the main driver of business growth.
After acquiring Verdant Creations and its four Ohio dispensaries, Cresco has about two dozen operating dispensaries across the country. It’s also buying Bluma well-being, which would add more than half a dozen outlets in Florida. The most interesting thing about Cresco’s retail approach is its focus on limited license states. With 15 dispensaries open in Illinois (10) and Ohio (5), Cresco is minimizing the competition it will face and allowing its brands to shine.
The more impressive sales engine because the business is its wholesale segment. When he completed his purchase of Origin House in January 2020, he came into possession of a coveted cannabis distribution license in California. Given that the Golden State is the world’s most lucrative marijuana market in terms of annual sales, having the ability to place potted products in at least 575 dispensaries across California is a sure-fire money-making endeavor.
Finally, forget about the dart throwing known as Dogecoin and put your money to work for the world’s most dominant social media company: Facebook (NASDAQ: FB).
Facebook finished last year with 2.8 billion monthly active visitors to its namesake site, as well as 3.3 billion people active monthly per family. The latter figure includes unique visitors to its other owned assets, such as Instagram and WhatsApp. In other words, 42% of the people on this planet, regardless of their age, visit a social platform owned by Facebook at least once a month. There is no social platform on this planet that has a larger audience or that can be targeted more effectively by advertisers. It’s worth noting that even in the deepest recession in decades for the U.S. economy in 2020, Facebook’s ad revenue still grew 21% from the previous year.
Moreover, it is almost mind-boggling to realize that Facebook has not even fully monetized its assets. Although its namesake site and Instagram generated more than $ 84 billion in ad revenue last year (accounting for 98% of Facebook sales), WhatsApp and Facebook Messenger are yet to generate significant revenue. When Facebook opens the floodgates, operating cash flow could absolutely skyrocket.
After years of being priced at a huge premium, Facebook continues to grow 20-25% per year, while still posting a price / earnings-growth ratio (PEG ratio) on 1. This is a good deal and a smart buy for long term investors.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.