If you have $ 4,000 to invest, buy these 4 best stocks now

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The bear market caused by the COVID-19 pandemic seems – at least for now – to be in hibernation, as the main stock indexes have gained between 19% and 29% since their trough on March 23. , are still down from 9% to 16% this year.

Although it is not yet clear whether the bear wrapped him up for the winter or whether he simply regained his strength before delivering another rout, two things are Certain: Investing offers the clearest path to generate wealth in the long term, and there are still stocks to buy before the market returns to setting new highs.

Assuming you have sufficient emergency funds and $ 4,000 (or less) you don’t expect to need in the next three to five years, here are four businesses that will thrive in the next few years. .

Woman with a credit card in one hand and a smart phone in the other making an online purchase on e-commerce.

Image source: Getty Images.

1. Shopify: e-commerce leads the way

Although the most obvious beneficiary of pandemic home support policies is Amazon, investing in the tech giant is not the only way to take advantage of the country’s highest dependence on e-commerce. Rather than putting your money behind the biggest player, why not bet on around 1 million small entrepreneurs who will be operational once the health crisis has passed?

E-commerce platform Shopify (NYSE: SHOP) offers investors the opportunity to do just that. The company operates in 175 countries and offers services in 20 different languages, allowing large and small businesses to sell their products online. This stock offers immediate diversification in terms of business size, geography and product lines.

A glance at his latest earnings report provides a glimpse of what to expect from the business in a post-coronavirus world. Shopify’s revenue grew 47% year over year in the fourth quarter, driven by solid growth in subscriptions and business solutions. The company also made a profit after recording a loss in the quarter of the previous year.

While management has withdrawn its directives due to the current economic uncertainty, Shopify reported that the drop in pedestrian traffic at brick and mortar retailers is pushing more online businesses – which will benefit it in the long term . Shopify has also taken a number of steps to help its merchants, including extended 90-day free trials, availability of gift cards, and in-store and curbside pickup and delivery for its merchants. at points of sale.

It doesn’t hurt that Shopify has a solid balance sheet, with $ 2.4 billion in cash and no debt.

Laughing little girl playing video games on the sofa.

Image source: Getty Images.

2. Activision Blizzard: The games we play

One of the ways people escape the seemingly endless days and weeks of coronavirus-induced lockdown is by playing video games. Their popularity had already increased sharply in recent years, the result of technological progress. At the same time, e-sports were already gaining ground and orders for home stays only accelerated the adoption of both. A company particularly well-placed to benefit from these booming trends is Activision Blizzard (NASDAQ: ATVI).

The company is the supplier of best selling franchises such as Call of Duty and World of warcraft, each offering seemingly endless permutations for their respective fans. Call of Duty: Warzone – its free Battle Royale offer – had 30 million players less than two weeks after its debut on March 10.

Investors shouldn’t underestimate the potential of esports, which is expected to grow from a market of $ 694 million in 2017 to $ 2.17 billion in 2023 – a compound annual growth rate (CAGR) almost 19% – according to the research firm MarketsandMarkets.

Activision Blizzard owns and operates two esports leagues linked to major franchises, namely the Overwatch League and Call of Duty League. While the former strives to resume matches in the city after the restrictions on home stay are lifted, the Call of Duty The League has moved its inaugural season to online competition only without missing a beat.

Activision Blizzard is also well positioned to weather the storm, with $ 5.8 billion in cash and only $ 2.7 billion in debt.

A young family huddled on the sofa under a blanket in front of the television.

Image source: Getty Images.

3. Netflix: it’s time to get mad

Home entertainment providers are seeing dramatic increases in traffic in a world plagued by COVID-19, and video streaming services have seen some of the biggest gains. While the trend was already well established, many people who had resisted the siren call are now flocking to platforms with the largest libraries, and no platform has more content than Netflix (NASDAQ: NFLX).

An increasing number of analysts entered the business in the weeks following the start of the pandemic. After deploying a variety of analytical tools, they all came to the conclusion that viewers are flocking to Netflix in unprecedented numbers.

The latest prognosis comes from analyst Matthew Thornton of SunTrust Robinson Humphrey. After analyzing a combination of research data, application downloads and regional data, Thornton thinks Netflix will post a record close to at least 9.5 million new subscribers in the first quarter, 2.5 million more than Netflix’s current forecast and 2 million more than analysts’ consensus of 7.5 million.

Thornton believes the company will also get a boost in the second quarter as more people who signed up in March will give up their free trial periods and become paying customers. Thornton also cites a strong list of content – like the escape hit Tiger king – and the attractiveness of local programming in countries around the world as factors that will not only attract new subscribers, but will keep them long after the crisis has ended.

Netflix has $ 5 billion in cash, but unfortunately its long-term debt has jumped to $ 15 billion, so it’s heavily in debt. The good news is that with more than $ 5 billion in new revenue each quarter and accelerating customer demand, Netflix should be able to easily weather the pandemic.

A woman on a laptop remotely signs a digital document.

Image source: DocuSign.

4. DocuSign: sign here

Another victim of social isolation may be the tradition of signing documents in person. The use of online signature software was already gaining ground, but with hundreds of millions of people taking refuge at home, remote signing became a business necessity rather than a convenience. This makes the electronic signature technology provided by DocuSign (NASDAQ: DOCU) more important than ever.

Its turnover increased by 39% in 2019, an acceleration from its gain of 35% the previous year. More importantly, 94% of his recent revenue came from subscriptions – which means he’s less likely to be negatively affected by a slowdown or even a recession, and his remote signing technology promotes efficiency, which is even more important in times of economic uncertainty. Management has shown confidence in the firm’s strong position by providing even stronger guidance than analysts had expected.

With homework mandates spanning the foreseeable future, businesses will be even more likely to adopt DocuSign technology. And once on board, it’s a safe bet that they will remain customers.

The company’s balance sheet is slightly worrying: it has $ 656 million in cash and short-term investments, but $ 465 million in debt. However, it should be noted that the debt is convertible into equity, which therefore represents less financial risk.

Invest to take away

Some investors will ask the inevitable question, “Why buy now?” To this question, I would answer: “Why not?” We cannot know if this volatile market has already reached its pandemic trough or if it should fall further – and anyone who claims otherwise simply blows smoke. However, as the market spends more time going up than going down, the best time to buy stocks is always “now”.

For investors who are not fully convinced that now is the best time to buy, I suggest another proven strategy: adapt gradually, buy stocks now and increase your positions later.



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