When it comes to choosing stocks to hold for the long term, it is wise to focus on the underlying business first. To earn your investment, a business must be able to have a solid track record of growth, possess a sustainable competitive gap, and enjoy favorable winds that can ensure continued prosperity for investors.
And while it’s true that COVID-19 has upended many once strong business models, it has also strengthened many incumbents who were able to successfully navigate a changing environment. In particular, trends in digitization, social media and e-commerce have been accelerated by the pandemic.
But whatever path the economy takes for the country’s future, these trends are here to stay, and these three companies are well positioned to take advantage of them – which is why they are good candidates to hold in your country. portfolio for the next decade or more.
Facebook (NASDAQ: FB) remains a central social media platform operator for millennials, millennials, and baby boomers, even though they don’t all promote the same apps. The company also operates WhatsApp and Instagram, and it’s an advertising giant. This dominance in the digital advertising space is expected to continue for the foreseeable future, as no other social media platform comes close to having its reach and recognition.
The company continues to post impressive numbers. Second quarter revenues were up 56% from the same period last year, while operating profit more than doubled to $ 12.4 billion. Net profit climbed 101% year-on-year to $ 10.4 billion. The average number of daily and monthly users increased by 6.9% and 7.2%, respectively.
Facebook is not resting on its laurels, however. CEO Mark Zuckerberg said on the company’s latest conference call that it is investing heavily in building what it expects to become the next big computing platform, which it calls “the metaverse.” – a virtual environment where people can hang out and play games with friends, as well as do things we can’t imagine doing on the internet today. More details on those plans will be revealed in the coming months, but it’s clear the company is taking steps to further strengthen its position in the industry.
The pandemic has prompted many business owners to expand their retail operations into the online arena, and Shopify (NYSE: SHOP) provides a platform that makes this transition seamless and convenient. The company provides entrepreneurs and large corporations with the tools to start and grow their e-commerce businesses, enabling them to reduce transactions.
With consumer spending on the rise, Shopify continued to experience strong growth. In the second quarter, its revenue increased 57% year-on-year to $ 1.1 billion. As more merchants have joined its platform, revenue from subscription solutions has grown 70% year over year. Monthly recurring revenue and gross merchandise value also continued to climb, up 67% and 40% respectively.
As the U.S. economy shifts to a hybrid workforce, Shopify will remain relevant for many years to come as more people explore the benefits of working from home and running their small businesses. The company continued to improve its platform by introducing customizable storefronts and enabling faster and more scalable payment. President Harley Finkelstein also revealed on the earnings conference call that more merchants on the standard plans switched to the company’s premium plan, Shopify Plus, in the last quarter, and that the company has also integrated international brands such as than the streaming giant Netflix (NASDAQ: NFLX) and global fashion company Aldo.
If you are looking for a handmade or vintage gift for a loved one, Etsy (NASDAQ: ETSY) platform will leave you spoiled for choice. The ecommerce company prides itself on having a wide selection of unique items that offer a personal touch. Etsy also offers influencer collections that generate strong engagement and lead to repeat purchases, a winning formula that brings more traffic to its site, which in turn attracts more sellers, creating a virtuous circle.
The numbers show that his strategy is working. In the first quarter, Etsy’s gross merchandise sales more than doubled year-over-year to $ 3.1 billion. Revenue increased 141.5% to $ 550.7 million while net profit increased 11-fold to $ 143.8 million. The number of active buyers and sellers saw healthy growth as Etsy worked to improve the platform’s search function.
The company recently announced two consecutive acquisitions to expand its product line and enter new regions. He paid $ 1.6 billion for Depop, a unique fashion market. This agreement gives him access to a younger clientele who love second-hand fashion. And its acquisition of Elo7, one of the top 10 e-commerce sites in Brazil, allows it to gain a foothold in the South American market. With these measures, investors can bet that Etsy can continue to show healthy growth in the years to come.
This article represents the opinion of the author, who may disagree with the âofficialâ recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning 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.