No one should ever confuse investing with gambling. After all, long-term investing has proven, time and again, to be the best way to build wealth. Meanwhile, the track record of long-term gambling is, to say the least, not as favorable.
As noted investor Peter Lynch once said, "One share of stock is not a lottery ticket; it's part ownership of a business."
Nevertheless, it is possible to hit the jackpot when it comes to investing. A smart investment in a great company can generate significant returns, and perhaps set someone up for life.
With that in mind, let's have a look at three stocks that have jackpot potential.
Image source: Getty Images.
1. The Trade Desk
Topping the list is The Trade Desk (NASDAQ: TTD) .
The Trade Desk lives in a sector that I'm particularly fond of: digital advertising . This industry is simply on fire, and because of that, the companies within it are worth considering.
As for The Trade Desk in particular , the company connects advertisers and publishers through a cloud-based platform. In short, it helps advertisers manage, monitor, and measure ad campaigns, which became more difficult as advertising has shifted to the digital realm.
Turning to fundamentals, The Trade Desk is firing on all cylinders. As of its most recent quarter (ended June 30), the company reported revenue growth of 26%. Overall customer retention held steady at above 95%, while the company announced new or expanded partnerships with key publishers, including Netflix , Roku , and SiriusXM , among many others.
In short, The Trade Desk is well positioned to capitalize on the long-term trend toward more digital advertising. Growth-oriented investors would be wise to take notice.
2. PayPal
Next, there's PayPal (NASDAQ: PYPL) .
Let's address the biggest issue right up front: It's true, the stock remains more than 74% off its all-time high, and over the last five years, the stock is a loser, having fallen more than 23%.
Yet, investing isn't all about what's happened, it's also about anticipating what is coming. And for PayPal, good things appear to be on the horizon.
PayPal's financials have turned positive after a few lackluster years. Free cash flow rebounded to $6.7 billion over the last 12 months -- the highest since 2019 and approaching an all-time high. Similarly, after hitting an all-time low of 14% in 2022, PayPal's operating margin has bounced back to 17.5%, within striking distance of the company's all-time high of 18.9%.
PYPL Free Cash Flow data by YCharts
It's all thanks to new CEO Alex Chriss' strategy: improving the company's fundamentals through cost-cutting and restructuring.
While the turnaround story at PayPal isn't for every investor, I think it's worth considering for those who are willing to buy and hold.
3. Monday.com
Finally, there's Monday.com (NASDAQ: MNDY) .
Monday.com is a company that makes work productivity tools packaged in the form of Work OS, the company's signature cloud-based operating system. Work OS has modules for sales, software development, and other organizational workflows.
From an investing standpoint, Monday.com's fundamentals are exactly what growth-oriented investors like to see. As of its most recent quarter (ended June 30), the company reported revenue growth of 34% as quarterly revenue rose to $236 million. Furthermore, the company turned profitable for the first time, with $2 million in operating income for the quarter.
For a company like Monday.com, which is still quite early in its growth cycle , attracting and retaining customers is all-important . On that front, the company is showing strength. Its net dollar retention rate (the rate at which the company retains and grows revenue from existing clients) stands at 110%. What's more , new customers -- particularly large customers -- are flocking to the company. The number of very large customers (those with more than $100,000 in annual recurring revenue) increased by 49% from a year earlier.
Monday.com has the growth profile that could send its shares much higher over the coming years. And that, in turn, could turn this stock into a millionaire-maker.
Should you invest $1,000 in Monday.com right now?
Before you buy stock in Monday.com, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Monday.com wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $728,325 !*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
See the 10 stocks »
*Stock Advisor returns as of September 30, 2024
Jake Lerch has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Monday.com, Netflix, PayPal, Roku, and The Trade Desk. The Motley Fool recommends the following options: short December 2024 $70 calls on PayPal. The Motley Fool has a disclosure policy .
Local News
Comments / 0