3 Long Term Growth Stocks Riding Post-Covid Trends

With all the hype in the Bitcoin world right now, some are tempted to pour all of their investment funds into Bitcoin. But the golden rule of portfolio diversification should not be neglected. After all, the Federal Reserve will continue to maintain its direct pipeline to the stock market. Furthermore, some long term growth stocks present a more resilient opportunity than others.

In the sphere of stock investing, many factors have to align for huge gains over a short period. For example, penny stocks may be an ideal form of stock investment on paper, but in practice, they are the riskiest. Of course, that doesn’t stop people from accepting the allure of penny stocks – the cheapest investment for the hope of rapid growth.

Growth Stocks with Long Term Potential

Having more than average rise in value – growth stocks – rarely happens for cheap stocks. However, when it comes to considering the best long-term growth stocks, the situation changes. When one combines the clarity of long-term trends with already established companies that can take advantage of them, you arrive at these investment opportunities.

1. Square (NYSE:SQ)

Receiving attention in recent months for transforming 1% of its total assets into Bitcoin, Square is poised to benefit greatly from the ongoing transition into a cashless society. This year, Square stocks have climbed by 236%, gaining 14% in the S&P 500.

According to Susquehanna Financial Group, 13% of its survey participants used Square’s P2P Cash App to buy Bitcoin. The decision to introduce Bitcoin trading in 2018 into Cash App was a huge success. It accounted for 72% of its revenue in Q2 2020. As a result of making Bitcoin accessible, while voiding long transaction times, Cash App’s user count grew to over 30 million active users.

Moreover, Square’s Cash App is supported with over seven million Cash Cards, providing small businesses with the infrastructure necessary to digitize their physical retail stores. Not just settling for payment processing, Square also provides effective e-commerce and website-building tools for small and medium-sized businesses. With both the growth of e-commerce and Bitcoin on its side, Square has a fertile future ahead.

2. DraftKings (NYSE:DKNG)

As governments destroyed millions of livelihoods in the middle of a pandemic with reduced relief paychecks, millions of people will be cut off from upward social mobility. At the same time, this directly affects how people tackle their uncertain life’s prospects. One of such avenues is online gambling.

From 2020 to 2027, online gambling is expected to expand by 11.5% in compound annual growth rate (CAGR), reaching a $127.3 billion market size. In the US alone, sports betting was always massive, set to grow to a $58 billion industry, as reported by investment bank Needham.

DraftKings offers Americans one of their favorite money-making pass-times – fantasy sports betting. Its sports booking revenue climbed by almost 100% for Q3 2020, while its user count rose by 64%. Moreover, DraftKings will benefit greatly from the rapid trend of legalization of online gambling across the states.

The most recent states to allow sports betting were Louisiana, Maryland, and South Dakota. To speed up its market penetration, DraftKings already signed deals with a broad range of sports leagues and sports networks, such as ESPN, New York Giants, and Major League Baseball. As the damage from pandemic lockdowns continues to unfold, it is almost a certainty that more states will legalize sports gambling to shore up their revenues. In turn, more people are likely to put their hopes on quick gains.

3. Tesla (NYSE:TSLA)

Although we already delved deep into the current and intermediate prospect for the electric vehicles (EV) industry, with General Motors being the rising star, Tesla’s cult following cannot be underestimated. So far, Tesla focused primarily on luxury EVs to bring the concept of electric cars closer to people. Needless to say, as Tesla’s stock jumped from $88,60 in January to over $600 in December, it has achieved that goal. And many investors are following the theory of mean reversion in the sense—the idea that long-term returns from an asset will return to their ‘mean’ level.

Such explosive growth is likely to be pricked, especially since GM outperformed Tesla in autopilot tests. Nonetheless, Tesla continues to improve its technologies to bring down the price of its cheapest models, which is currently Model 3. Such streamlining ranges from more gigafactories coming online (total of four in the immediate future) to introducing tabless batteries – 4860 cells – the new generation of batteries expected to increase Tesla’s EV range by 16% and 14% cheaper cost per kilowatt hour.

Many view the current Tesla valuation as a bubble, but it served to raise additional capital to invest in R&D and manufacturing processes. More importantly, more and more countries and states will legislate gasoline-powered vehicles out of existence, with Biden admin leading the way. With all these factors combined – cultural, technological and institutional – Tesla makes for a great long term growth stock.

When it comes to long term growth stocks, what companies do you think of? Let us know in the comments below.

Disclosure: Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.