Forget AMC and GameStop: these 5 actions are the 10 future baggers

Despite record volatility in 2020, the new year looks set to surpass its predecessor. For just over two weeks, members of the WallStreetBets discussion board on social news sharing site Reddit have banded together to take on Wall Street hedge funds and investment banks.

This group of retail investors, which numbered 7.5 million people as of January 31, was targeting high short-interest stocks – that is, companies with a large number of stocks held by pessimists who seek to change the price of a share. inferior. By pushing up the prices of heavily shorted stocks, these retail investors created short pressures galore.

Until January, retailer of video games and accessories GameStop (NYSE: GME) and cinema chain AMC Entertainment (NYSE: AMC), the poster shares of this Reddit rally, rose by 1,625% and 525% respectively. But in reality, the underlying business of either company is close to its current valuation.

Without digging too deep into the weeds, GameStop is busy shutting down physical stores to cut operating expenses, while AMC Entertainment is issuing stocks and debt in an effort to avoid bankruptcy. None of these scenarios deserve a 1625% or 525% share price appreciation, especially when GameStop and AMC are not guaranteed to survive in the long term.

Rather than chasing those Reddit darlings, might I suggest buying the following five stocks, all of which have true 10-bag potential this decade?

Teladoc Health

Instead of worrying about whether your stocks will be available in two or three years, you could buy telehealth kingpin stocks. Teladoc Health (NYSE: TDOC), which is on track to be one of the fastest growing large-cap healthcare stocks of this decade.

Although the 2019 coronavirus disease pandemic (COVID-19) has helped Teladoc’s virtual tour to more than triple in the second and third quarters, it is more than just a COVID-19 play. Telehealth is a victory for all concerned. It is more convenient for patients, allows physicians to fit more visits into their busy schedules, and can typically be billed at lower rates than office visits. This last point makes telemedicine a logical solution for health service providers.

In addition, Teladoc Health acquired the applied health signals company Livongo Health in early November. Livongo has steadily doubled or nearly doubled its number of diabetic subscribers, and the company has turned the corner to profitability, despite securing just over 1% of the diabetic patient pool in the United States.

With Livongo expected to expand its services to include hypertension and weight management, and Livongo / Teladoc able to sell between their networks, the patient pool potential for the new Teladoc is enormous. This is one of the main reasons why Teladoc is the action that excites me the most right now.

Square

You may have the impression that the payment company Square (NYSE: SQ) has come too far, too fast, especially since the US economy is still on its feet. But I think we’ll look back in 9 or 10 years and realize that Square was still clearing its throat before take off.

Square’s seller ecosystem is expected to continue to be a constant source of growth and gross profit. This operating segment provides point-of-sale devices and analytics primarily to small businesses.

Prior to the unprecedented small business disruption caused by COVID-19, gross payment volume on Square’s network had grown at an annualized rate of 49% between 2012 and 2019. What’s worth watching is the growing number of mid to large businesses suddenly using Square’s seller ecosystem. As a merchant fee-driven segment, Square would welcome large merchants.

Of course, the big buzz about Square is the peer-to-peer Cash App payment platform. While the Cash App allows Square to collect merchant fees and wire transfer fees, the growth potential appears to be focused on investing and trading bitcoin. In less than three years, we’ve seen monthly active Cash App users more than quadruple to 30 million and will likely overtake the seller ecosystem in 2021 as the primary driver of gross margin.

Trupanion

If you want a true paw-tential, forget about AMC and GameStop and buy into a wellness growth story, like a pet health insurance provider. Trupanion 9:30 a.m. NASDAQ: TRUP.

The statistic that should be of interest to investors in Trupanion is the total addressable market. Only about 1% of pet owners in the United States have health insurance for their dog or cat. By comparison, pet insurance rates are considerably higher abroad (eg 25% in the UK). If Trupanion can penetrate even 25% of the US market, it is an addressable market worth over $ 32 billion in today’s dollars. Due to this low penetration rate, Trupanion is expected to have few problems maintaining a double-digit growth rate throughout the decade.

In addition, Trupanion has established invaluable relationships with veterinarians at the clinical level. It is a company that has been around for two decades and is currently the only provider of pet health benefits in the United States with software that allows direct payments to vets at the time of payment. This is quite an incentive for vets to suggest Trupanion coverage options.

OrganiGram Holdings

The next decade should also see marijuana stocks shine. While US jar stocks have a much wider track of success, a licensed Canadian producer with potential 10 baggers for patient investors is based in New Brunswick. OrganiGram Holdings (NASDAQ: OGI).

OrganiGram is an interesting case, as it is the only major producer in Canada with a single grow facility (Moncton, New Brunswick). Having only one installation makes it much easier for OrganiGram to adjust its production and expenses to market conditions. You could argue that the company’s supply chain should also be much more efficient, with everything located in one facility. As a final note on the Moncton grow farm, OrganiGram uses a three tier grow system in licensed rooms, which will help maximize yield.

Beyond mere efficiency, OrganiGram has devoted a large part of its product portfolio to derivatives. It has purchased fully automated equipment capable of producing up to 4 million pounds of chocolate edibles each year, and the company has developed a proprietary powder that can be added to drinks to speed up when cannabinoids take effect. Derivatives offer much juicier margins than the dried cannabis flower, and they will be the key to OrganiGram’s push to recurring profitability.

Pinterest

Last but not least, booming social media Pinterest (NYSE: PINS) will make people forget about AMC and GameStop.

Similar to Teladoc, Pinterest has benefited greatly from the COVID-19 pandemic. With people stuck at home, they’ve spent more time online than ever before. This has led to an increase in the number of Monthly Active Users (MAUs) and an acceleration in the growth of MAUs compared to the previous three years.

In particular, Pinterest got the majority of its MAU news from overseas markets. While advertisers tend to pay significantly more to push their products ahead of US MAUs, the rapid increase in international MAUs is expected to allow the company to double its average revenue per user several times this decade.

Pinterest is also perfectly set to become a top ecommerce destination. Think about it … no other social platform allows users to voluntarily and easily share the products, places and services that interest them. This makes enterprise MAUs the ideal target base for small businesses. All Pinterest has to do is build user loyalty and make sure small businesses have the tools to turn browsers into buyers.

Forget about Reddit rally stocks and focus on companies with tangible potential.