A lot can happen in 50 years’ time, and you likely won’t buy a stock and ignore it, so it seems almost disingenuous to talk about holding stocks for five decades. While there are no companies that you can simply forget, there are some that significantly increase the chances that they’ll still be beating the market come 2068.
With that in mind, we asked three Motley Fool investors to choose top companies that they believed were positioned to stand the test of time. They offered convincing arguments for the following stocks:
Top Low Price Stocks To Buy Right Now: BroadVision, Inc.(BVSN)
BroadVision, Inc. (NASDAQ:BVSN) is another company that got its start in the heady days of the late 1990s. Launched in 1993, its first ecommerce product went on sale in 1995 and it IPO’d in 1996.
After surviving the great bubble burst, BVSN expanded into China with new SaaS products in 2006 and was already upping its cloud game by 2010.
It continues to develop new products but the problem is, it never really found its niche over the years. Now it is just one more SaaS firm with one unique product. This is a tough sell now that SaaS solutions are common and the market is well populated.
Off 50% in the past year, it may not be the end for BVSN, but the road back is going to be tough.
Top Low Price Stocks To Buy Right Now: Fortinet, Inc.(FTNT)
Fortinet Inc (NASDAQ:FTNT) is another really big, really strong cybersecurity company that is a lot like Palo Alto Networks. Fortinet just has less juice in its growth story. The company isn’t as big, the growth rates aren’t as large, and the margin expansion narrative isn’t as strong. But FTNT stock is also less expensive, and that makes the stock an interesting option for more risk-adverse investors.
Revenue growth over the past five years at Fortinet has run in the 20%-plus range. That isn’t Palo Alto Networks levels. But it is still pretty good.
That growth rate isn’t slowing all that much. FTNT just reported quarterly earnings, and that report included 17% revenue growth. Therefore, it looks like double-digit revenue growth is here to stay for the next several years.
Word of caution: FTNT’s quarterly numbers were very good, and they were much better than expected. But FTNT stock failed to stage a meaningful rally as a result, and that is usually a sign that a near-term top is in.
Long term, though, FTNT stock is still a winner. Revenue growth remains robust, driven by secular tailwinds, while margins continue to head higher.
Top Low Price Stocks To Buy Right Now: General Motors Company(GM)
Concerns that the North American automobile industry is at the early stages of a downturn and threats of long-term disruption posed by emerging technologies are weighing on General Motors. Shares are down 10% year to date compared to a 1% dip for the S&P 500 index.
Electric vehicles, ride-sharing services, and self-driving cars all present variables for the business, but it seems like General Motors’ innovation initiatives and manufacturing advantages aren’t getting their due. While the market seems to be taking a more cautious outlook on Tesla, that reappraisal doesn’t appear to have resulted in increased confidence in GM’s future.
The auto giant has made a lot of smart moves to prepare for new trends in its industry and improve the business since the disastrous impact of the last recession. The company is currently the leader in electric car production and expects to launch 20 new electric vehicles through 2023. It’s also an early leader in the self-driving-technology space and has a significant stake in the ride-sharing market thanks to its roughly 9% ownership stake in Lyft and partnership with Uber.
The cyclical nature of the automotive industry means GM’s profits will see a significant declines if the broader auto market continues to move through a down cycle, but shares look attractively price even with that possibility in mind. The stock trades at less than six times forward earnings estimates and packs a roughly 4.1% dividend yield. With the cost of distributing its current payout representing just 24% of trailing earnings, GM looks to be in a good position to continue returning cash to shareholders.
Top Low Price Stocks To Buy Right Now: Square, Inc.(SQ)
Square supplies point-of-sale (POS) terminals to merchants, offers mobile payment services, has a popular peer-to-peer payment app called Square Cash, provides small business loans through Square Capital, and has its own online food ordering business, called Caviar.
Square’s share price has seen astronomical gains over the past 12 months as the company has grown its sales and client base. Net revenue was up 36% year over year in the fourth quarter, and the company’s gross payment volume (the total amount processed through its payment systems) grew by 31% to $17.9 billion. Investors have also been impressed with the company’s ability to increase its EBITDA, which jumped 38% in Q4 to $41 million and 33% year over year to $36 million in Q1.
Square makes the vast majority of its revenue from payment transactions on its platform, but the company’s other businesses offer additional opportunities as well. For example, its mobile payment Cash app now has 7 million monthly active users. Square is also growing its subscription and services revenue, which was up 95% in 2017; the segment now accounts for 11% of Square’s total sales (up from just 8% in 2016).
So can Square keep the momentum going? The company has a few things working in its favor, including the fact that it’s adding larger customers on its platform. Companies selling $125,000 or less per year accounted for 53% of the company’s gross payment volume (GPV) in the fourth quarter of 2017. Customers spending $500,000 or more annually make up 20% of GPV, up from 13% two years ago. Square is also doing a good job building out a payment ecosystem by selling everything from the hardware (payment terminals) to point-of-sale software, its mobile Cash app, lending services, and even its food delivery business.
But Square isn’t without its risks, of course. Investors should keep a close eye on what some of the company’s competitors are doing with mobile payments and point-of-sale services. Both Intuitand PayPal offer similar services. Square is building a strong brand right now, but it doesn’t have an economic moat around its business yet. For many merchants, especially smaller ones, the switching costs are pretty low for them to jump to another payment processor. That’s not to say Square’s a bad investment, but investors should know that the company still faces lots of competition in this growing market.