Having $10,000 is nothing to sneeze at. However, for those who invest wisely, it can become so much more.
How much more? Well, consider this: A $10,000 investment in Apple, made one month after the introduction of the iPhone in January 2007, would have grown to nearly $667,000 today. Needless to say, that’s quite a bit more than $10,000.
So, with that in mind, let’s take a look at a few growth stocks that may have the power to turn $10,000 into something much more valuable.
Topping the list is Lululemon (LULU ). A maker of athleisure clothing and accessories, Lululemon focuses on the upscale consumer clothing market.
Despite fears that the consumer economy may be on the rocks, Lululemon’s sales figures continue to climb. The company reported $8.8 billion in revenue over the last 12 months, while quarterly revenue grew 18% in its most recent quarter (the three months ending July 30).
What’s more, the company’s gross profit margin increased to an all-time high of 59%, demonstrating that Lululemon’s pricing power remains as strong as ever.
Granted, Lululemon’s inventories (i.e., raw materials used to produce products or the finished goods awaiting sale) remain a concern. The company reported $1.7 billion in inventory last quarter. While most retailers stock up ahead of the busy end-of-year holiday season, Lululemon’s inventory increased 115% over the last three years — raising concerns that price cuts may soon be necessary.
Nevertheless, the company’s fat margins and rapid growth should still catch the eye of growth-oriented investors looking for a retail stock with room to run.
For investors looking for international growth, MercadoLibre (MELI) is a name to remember. The company, which operates Latin America’s largest commerce and payments platform, boasts red-hot growth.
In its most recent quarter (the three months ending on September 30), MercadoLibre posted quarterly revenue of $3.8 billion, representing year-over-year growth of 40%. What’s more, net income is soaring. MercadoLibre posted $359 million in net income, far ahead of analyst expectations of about $300 million. Meanwhile, operating margins grew to 18%, up from 16% in the previous quarter.
In addition, MercadoLibre’s shares boast a reasonable valuation. Shares trade at a price-to-sales (P/S) ratio of 5.5. That’s roughly half of their three-year average of 9.9.
All this means opportunity remains for investors looking for rapid growth who are also ready to ride out the volatility that comes from exposure to the Latin American e-commerce market.
Last, but certainly not least, is Amazon (AMZN 0.59%). This juggernaut of a stock is finally looking like itself after two years of wandering the wilderness. In fact, shares remain 13% below where they were three years ago — despite this year’s 64% year-to-date rally.
The company is a behemoth, with several segments that would be impressive companies in their own right. Consider this infographic, which illustrates Amazon’s massive revenue streams.
While Amazon’s e-commerce and Amazon Web Services (AWS) cloud business are the company’s bread and butter, there is another segment that is growing in importance: advertising.
In its most recent quarter (the three months ending on Sept. 30), Amazon generated $12.1 billion in ad revenue — up 26% from a year earlier. That’s more than double the growth of its AWS business, where revenue grew only 12%.
Granted, AWS remains an important growth driver for the company, and management is likely to redouble its effort in cloud services going forward. However, investors should keep an eye on the ad business, as the company continues to find robust demand for Amazon’s ad business.
In short, Amazon holds key competitive advantages across several business sectors: e-commerce, cloud services, and digital advertising. This means for growth-oriented investors, Amazon is an easy choice.
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