Especially when it comes to managing money, everyone feels like starting over from time to time. If I had the chance to go back and do something different with the knowledge I now have, the results would be much more favorable.
Of course, it is impossible to return to the past. But what you can do is learn from the investment journeys of these three Motley Fool contributors of hers. If this three of her now he had to start with $15,000 and build a stock portfolio from scratch, they would split the money. digital ocean (document), Veeva system (VEEV -0.94%), Shopify (shop 2.50%),and S&P 500 index fund. Here are the reasons why these three stocks are attracting attention.
The future of the economy is digital
Anthony Di Pizio (DigitalOcean): If you need to make a series of investments today, start by identifying the industries that have the potential for growth over the next decade (and beyond). We then set our sights on quality companies within those sectors. That’s how we landed on small cloud computing powerhouse DigitalOcean. Competing with giants such as Amazon web service and microsoft Azure, it’s a success.
What does Digital Ocean do? It provides cloud services to businesses to help them with simple tasks like storing data online and hosting websites. They also do more complex operations like developing software and streaming video content to customers. DigitalOcean specializes in serving small businesses with less than her 500 employees, a segment of the cloud market that large providers often overlook.
The company differentiates itself from its competitors by offering pricing models that are well-suited for businesses in the early stages of their launch or lifecycle. Additionally, it provides a more personalized level of service, which helps when scaling up from the start.
Over the past four quarters, DigitalOcean has generated $533 million in revenue. Most of that comes from his 142,100 customers who spend $50 or more per month. But that’s just a fraction of a $72 billion market estimated by DigitalOcean at the moment, with a lot of room to grow.
Additionally, the broader cloud market is set to explode in value for the remainder of the current decade. Grand View Research estimates that by 2030, it could be a $1.5 trillion opportunity each year.
lay the foundation
Jamie Louko (Veeva Systems): Building a portfolio is a lot like building a house. The most important aspect is a solid foundation. The foundation of your portfolio should be built with stable companies like Veeva Systems that may be thriving decades from now.
Veeva provides cloud-based software and data storage tools primarily to pharmaceutical and biotech companies, and many of the tools are used by many of the world’s top 20 pharmaceutical companies, giving Veeva a competitive advantage. It stands out in terms of points. We also have products for businesses of all sizes. If you’re a startup looking for an end-to-end clinical trial management tool, Veeva is for you. But it also has customer relationship management tools and a data cloud for the largest enterprises.
This means Veeva can be with any pharma company at any point in its lifecycle, and as your company grows, you can expand your use of Veeva. As such, as of Q2 2023, the company has over 100 customers using 8 or more commercial tools and over 200 customers using 5 or more R&D products. I was.
Once the software is built, it costs very little to allow more customer access, so Veeva’s adoption has resulted in incredible profitability. Over the past 12 months, Veeva posted his 37% free cash flow margin and 19% net profit margin.
Veeva’s dominance in the pharmaceutical industry allows us to provide a level of safety and stability over the long term. However, it can also realize growth in the next few years. Veeva sees total manageable opportunities worth $13 billion going forward. Given the company’s revenue of just $2.1 billion in the last 12 months, Veeva clearly has room to dominate the market further. That’s why you invest in Veeva when building your portfolio from the ground up.
Market leader in e-commerce software
Trevor Janewayne (Shopify): If you need to start investing from scratch, split your available funds 75/25 between S&P 500 index funds and Shopify stocks respectively. The S&P 500 Index Fund instantly diversifies my portfolio, providing exposure to a variety of high-quality US companies across all 11 market sectors. In other words, buying an S&P 500 index fund is like buying a slice of the US economy. That’s why Warren and his Buffett have long advocated that investment strategy.
Shopify investment themes, on the other hand, are straightforward. Canadian commerce companies serve as the central nervous system for millions of businesses around the world. Its software helps merchants manage sales across their physical and digital stores.It also offers adjacent solutions for payment processing, funding, and shipping, and is supported by online marketplaces such as Amazon and Amazon. Etsy, social media such as TikTok, and consumer websites for buyers around the world. No other commerce company offers such convenience.
Shopify first caught the attention of small businesses, but the company has successfully expanded into the luxury market with Shopify Plus, a customizable commerce platform for large brands. Last year, innovations like machine learning-powered marketing software and business-to-business (B2B) commerce tools expanded Shopify’s addressable market while making Plus an even more attractive option for merchants.
For example, U.S. retail e-commerce sales are expected to grow at an annual rate of 12% and reach $1.7 trillion by 2026. Meanwhile, his B2B e-commerce sales in the US are expected to grow at an annual rate of 10% over the same period to reach $2.5 trillion. This is especially notable as Shopify will account for his 10.3% of U.S. retail ecommerce sales in 2021, making him the nation’s second-largest digital retailer behind Amazon. Shopify is also the most popular e-commerce software vendor, according to research firm G2.
Shopify’s stock is currently trading at 8.8x sales, discounting 35.2x its three-year average sales. This makes it an attractive entry point for investors.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no positions in any of the mentioned stocks. Jamie Louko has held positions at Amazon.com, Etsy, Shopify, and Veeva Systems. Trevor Jennewine has held positions at Amazon.com, Etsy, and Shopify. The Motley Fool has positions and endorses Amazon.com, DigitalOcean, Etsy, Microsoft, Shopify, and Veeva Systems. The Motley Fool recommends options for a long $1,140 Jan 2023 call on Shopify and a short $1,160 Jan 2023 call on Shopify. The Motley Fool’s U.S. headquarters has a disclosure policy.