Back in 2013, the acronym ‘FANG’ was used by Wall Street analysts to describe leading tech stocks. Then, with the resurgence of Apple (AAPL), what we now know today as the FAANG stocks was complete.
Since then these leading technology companies — Facebook (FB), Amazon (AMZN), Netflix (NFLX), and Google (GOOGC)(GOOGL) have gone on to lead the stock market to new heights despite the COVID-19 Pandemic.
But that was then.
Today, we’re seeing the emergence of a new group of dynamic tech companies take the baton.
These new giants are disruptive, employ groundbreaking ecosystems, and are leading the next generation of tech stocks.
These exceptional stocks are well known on Wall Street yet there is strong potential for outstanding returns in the decade ahead.
SMART Stock #1: Square (SQ) is a payment processing company focused on two ecosystems:
A seller’s-side with a point of sale and managed payments system and a consumer-side with Cash App.
Shares have doubled in price since April and the Cash App now represents 33% of Square’s gross margin and has surpassed PayPal’s Venmo in interest.
SMART Stock #2: Match Group (MTCH) is the leader in online dating.
Online dating is the primary way couples meet today, as difficult as that may be for older generations to understand.
Multiple apps serve a wide range of demographics and psychographics and these platforms including Tinder and Hinge as well as others, offer wide-open potential for average revenue per user also known as ARPU.
Matche’s long term growth has been impressive since going public and its Gross Margin reached 76% in FY 2019.
SMART Stock #3: Alteryx (AYX) is a leader in data analytics and data science.
The science of data analytics can be quite cumbersome, that’s where Alteryx is excelling, as it boasts an open platform that is scalable, offers repeatable workflows, and is user friendly.
It makes data available to everyone as its low-code model allows creative data-based solutions for those who have limited knowledge of computer programming as well as those that are well versed.
Alteryx has experienced excellent growth although it experienced a COVID slowdown, yet its gross margin grew from 79% in 2015 to 91% as of early July 2020.
SMART Stock #4: Roku (ROKU) is pure play ad-supported connected TV.
Roku offers the largest connected TV ecosystem and offers its own ad-supported channels and supports all streaming services.
It’s a shift to digital advertising and is being bolstered by the coronavirus as it rocks the three pillars of growth:
–User Growth – Active accounts were up 37% year over year in the most recent quarter, to 40 million.
–Engagement Growth – Streaming hours were up 13.2 billion, an increase of 49%.
–ARPU Growth was up in the first quarter of 2020 by 28% to $24.35.
SMART Stock #5: The Trade Desk (TTD) serves the programmatic ad market in a digital format covering the entire digital advertising field.
The company helps its customers optimize their advertising dollars throughout the internet.
eMarketer is anticipating digital ad growth in 2020 to expand despite the effects of COVID 19 by 2.4% and continue to experience double-digit growth in 2021 and beyond.
As the industry continues its movement into digital advertising TTD continues to see the greatest growth in its CTV sector, citing growth of 100% year over year most recently.
Its gross margin ending the fiscal year 2019 was 79%, and revenue growth has slowed due to COVID but remains healthy at 33%.
Your Bottom Line
These 5 “SMART” stocks should not be discounted as missed opportunities as they rose in value, but should be proven foundations in your portfolio of leading digital tech companies poised for future growth.
The BLI Staff