3 growth stocks that could be the next 10 baggers
There is no doubt that the road to long-term wealth creation is paved with investments in quality stocks that have taken place for years, if not decades. That said, there is a rare breed of companies that have the potential to increase their value tenfold, becoming a “10-bagger”. These elusive stocks are hard – but not impossible – to find, if you know where to look.
On this clip of Motley Fool Live registered on February 5, “The Wrap” host Jason Hall and Fool.com contributors Danny Vena and Brian Withers have come up with three companies that have the potential to join this exclusive club of 10 baggers.
Jason Hall: I thought it would be fun to ask each of you to look at your portfolio. Brian, coming out of the last hour, we talked about some of our own 10 baggers we’ve had before. I thought it would be fun for us to talk about the stocks we own that haven’t been to 10 baggers yet, but we think they could be our next 10 baggers. Danny Vena, I’ll let you throw this one too.
Danny Vena: I must have thought very little about it. [laughs] Very little. You might be surprised at the answer, but I’m looking at what the next 10 bagging will be. Which I think will reach 10 bagger status sooner than anything else and my wallet. You might be surprised to learn as bullish as I am on a number of stocks, I think it’s going to be Fifth (NYSE: FVRR). Fiverr, to me it feels like it has all the attributes of an ecommerce stock, it has the online digital selling platform that connects businesses with freelancers, that taps right into the gig economy. , which is becoming so important a part of the way people work today.
If you look at what the company has been up to, I mean just recently in the third quarter, for example, its revenue increased 88% year-over-year. Although it is not yet profitable, its net loss has improved by around 95% and the company is on the verge of being profitable.
I think it has a huge addressable market somewhere in the neighborhood of, I mean $ 115 billion, and the company has only generated $ 163 million in the last 12 months.
I think this company really has everything in place to seriously be the next 10 bagger in my portfolio. I am watching him closely, but yes I will go with Fiverr International.
Jason Hall: Well I think you got a good shot there. It’s already a 12 bag for me so I had to slip it in. I bought it once and it was because someone from Motley Fool recommended that I buy it. I love it, Danny, really, and I think it’s going to continue to win. Brian Withers, how about you? What’s the next 10 bagger in your wallet?
Brian Withers: It’s always difficult because you have to give it time. It doesn’t happen overnight and a lot of my stocks have really taken off over the past year.
I have to look at the smaller market caps, and I think nCino (NASDAQ: NCNO) may be able to break.
nCino is currently a company of around $ 7 billion, with a market capitalization. They serve the banking industry and have a suite of highly configurable, cloud-based back office products that allow banks to put their operations in the cloud and get rid of paper, or get rid of the legacy systems that run them. have driven down. . It is built on the salesforce.com (NYSE: CRM) platform, so I think it will follow in the footsteps of Veeva Systems (NYSE: VEEV), which did the same for the life science industry.
But there are thousands of banks trying to compete with upstarts like Square (NYSE: SQ) and Pay Pal (NASDAQ: PYPL) and need to become more efficient in their office operations, and I think that’s one way to do it.
Jason Hall: I’m going to take a slightly different approach here as well. I think I’ll go-
Danny Vena: Something named Brookfield?
Jason Hall: No I’m not. It’s crazy to think about it. I will take a different approach and I will take stock of the investments in which I have invested several times. It’s also a stock that pays a small dividend, so I stumbled upon this one. It’s a title that only went up 233% for me, but I think it’s a title that has a very good chance of collecting 10 sacks in the next 10 years, and that’s Kinsale Capital Group (NASDAQ: KNSL), KNSL. They’re in the specialty insurance business, they’re starting to take advantage of technology in a pretty smart way. They are very, very well managed. They have a lot of insiders with a lot of skin in the game. You’re just starting to line up the metrics and ticks that tend to correlate with investments that are crushing the market, and I really do, I love it. Kinsale Capital Group, KNSL ticker, to be my next ten-bag.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging 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.