Most investors are in the market for monster stocks — ones that will grow at brisk rates, making shareholders richer more quickly than sleepier stocks will. It can be hard to identify those stocks early, but you don’t really have to do so. You can often do quite well by buying into terrific stocks after they’ve already posted lots of great gains.
Here are five stocks to consider holding for the next decade, as they stand a good chance of posting impressive gains. If you don’t already own them, you might buy into some now and add others to a watch list.
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|
Stock |
10-year average annual return |
15-year average annual return |
|---|---|---|
|
Nvidia (NASDAQ: NVDA) |
76.13% |
49.57% |
|
Netflix (NASDAQ: NFLX) |
31.05% |
35.68% |
|
MercadoLibre (NASDAQ: MELI) |
30.18% |
28.27% |
|
Meta Platforms (NASDAQ: META) |
22.19% |
N/A |
|
SPDR S&P 500 ETF |
13.10% |
13.92% |
Data source: Morningstar.com as of Nov. 18, 2024.
I included the performance of a simple S&P 500 index fund, as well, for comparison. Now let’s take a closer look at each of the five stocks.
Semiconductor powerhouse Nvidia is a stock everyone wishes they bought many years ago, due to its phenomenal performance — especially in the past few years. Nvidia used to be known mainly as a gaming chip maker. It’s still in that business, but it’s now also focused on data centers, which need more and more chips as artificial intelligence (AI) technology proliferates. The company is doing quite well in both data center chips and PC graphics cards used for gaming and more, with commanding market shares. (It recently held 88% of the market for graphics cards, for example.)
If you’re a long-term investor who owns shares of Nvidia, I think you’d do well to hold for many more years. If you don’t already own it, though, here’s some good news: The stock actually doesn’t look wildly overvalued. Its recent forward-looking price-to-earnings (P/E) ratio of 36 is below the five-year average of 41, for example.
Netflix is an even more familiar name, with a wildly impressive long-term stock performance. Since launching as a rent-DVDs-by-mail service, it has grown into an entertainment juggernaut, offering lots of original and non-original streaming content, including games and live sporting events.
Despite the fact that it already has more than 280 million streaming paid memberships worldwide, Netflix is still growing, with revenue increasing by 15% year over year in its last quarter and subscriber numbers growing by 14%. It has a big market-share lead over competitors and lots of room to grow more, especially internationally.
With its recent forward P/E of 34 near its five-year average of 36, Netflix’s stock seems reasonably valued at recent levels — especially for long-term investors. The stock may not keep growing at heady rates, but it should still grow for years to come.
MercadoLibre is not a generally well-known name, primarily because it’s a major presence in Latin America, not the U.S. It’s worth getting to know the company, though, because it has been growing like gangbusters — and after a recent pullback, its now-lower price presents an appealing buying opportunity.
Some have likened it to a combination of eBay and PayPal, as it encompasses both a dominant online marketplace and a major “fintech” business. In its own words, it’s “the leading company in e-commerce and financial technology in Latin America, with operations in 18 countries,” with “a complete ecosystem of solutions for individuals and businesses to buy, sell, advertise, obtain credit and insurance, collect, send money, save, and pay for goods and services both online and offline.”
The stock seems appealingly valued, too, at recent levels, with a forward P/E of 41, well below the five-year average of 85.
Finally, there’s Meta Platforms, parent of Facebook, Instagram, Messenger, Threads, and WhatsApp. It’s also presenting an intriguing buying opportunity, as its stock has pulled back a bit recently. That pullback happened despite the company posting strong revenue growth — with third-quarter revenue up a hefty 19% year over year. It was mainly due to management noting high expected spending on AI.
It’s hard to not see Meta Platforms growing robustly in the years to come, as it has a massive base of users — billions of them — across its platforms, to whom all kinds of moneymaking services can be offered. It’s already doing a good job of monetizing its users, with operating profit margin growing.
So consider holding these monster stocks longer if you already own them, and if you don’t, perhaps take a closer look at each, to see if it deserves a berth in your long-term portfolio now or later.
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
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Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $378,269!*
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Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,369!*
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Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $476,653!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of November 18, 2024
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Selena Maranjian has positions in MercadoLibre, Meta Platforms, Netflix, Nvidia, and PayPal. The Motley Fool has positions in and recommends MercadoLibre, Meta Platforms, Netflix, Nvidia, and PayPal. The Motley Fool recommends eBay and recommends the following options: long January 2027 $42.50 calls on PayPal and short December 2024 $70 calls on PayPal. The Motley Fool has a disclosure policy.
4 Monster Stocks to Hold for the Next 10 Years — Including Nvidia was originally published by The Motley Fool
Source: finance.yahoo.com