“26 stocks under $10 billion market cap with big growth potential”
The last time I did one of these lists was August 18th, 2020 and the companies on that list are down below. Next to the stock symbols are the performance numbers using the closing prices on August 18th and December 1st.
Company Performance
$API -11.0%
$APPS +67.6%
$CELH +50.6%
$CRNC +63.6%
$CYRX +57.9%
$EVER -6.2%
$FTCH +82.4%
$FVRR +69.8%
$GRWG +88.8%
$GWPH +28.2%
$IIPR +29.5%
$LRN -47.4%
$NLS +50.8%
$NVTA +52.4%
$OTRK -5.1%
$PGNY +22.4%
$RDFN +14.0%
$SDGR -1.2%
$TWOU -18%
$ZYXI -16.7%
My list: +28.6%
Dow: +7.3%
Nasdaq: +10.2%
S&P 500: +8.3%
Russell: +16.9%
I still like most of the companies from my previous list and I currently own $CELH $FTCH $FVRR $GRWG in my own portfolio. Until recently I also owned $APPS $CYRX $NLS $IIPR and $OTRK but sold these positions to lock in some profits.
Even though I’d still be buying most of these companies I decided not to reuse any of them for at least 6 months because my goal is to bring 20+ new growth stocks to my newsletter subscribers at least once per quarter although starting in January I’m switching to a weekly newsletter with 2–3 stocks.
Disclaimer: The group of stocks below is not intended to be a list of buy recommendations. Some of the stocks mentioned have smaller market capitalizations and therefore can be very volatile. Some of the stocks mentioned have also had big moves in recent weeks and therefore could be overdue for a pullback. I encourage everyone to do their own research and due diligence before buying any stocks. Please manage your portfolio and position sizing in accordance with your own risk tolerance and investment objectives.
$AHCO — AdaptHealth Corp.
Current price = $35.52
Market cap = $2.3 billion
Headquarters = Plymouth Meeting, Pennsylvania
Website = https://www.adapthealth.com/
2020 revenue growth (est.) = +94%
2021 revenue growth (est.) = +92%
Chart: https://chrt.biz/AHCO/1907481tlaq/chart/
AdaptHealth is a network of full-service medical equipment companies that use tailored products and services to empower patients to live their best lives. With operations in 35 states the company offers clinically driven products and services designed to help patients adapt to life in the home including: sleep and respiratory therapy (CPAP, biPap, Oxygen and others), mobility products, wound care, non-invasive ventilation, and nutrition to patients with special dietary ailments such as diabetes. AdaptHealth serves over 800,000+ patients per year and has 800+ commercial insurance contracts. This week the company announced the acquisition of AeroCare which is not only accretive to earnings but helps the company expand into new markets including 47 of the 48 continental US states [click here].
My take: I had never heard of this company until a few weeks ago when I started doing more stock screeners and research for this list. Since then I’ve tried to spend a couple hours on every single company including $AHCO. To be honest there’s nothing super sexy about this company except for the fact that they’re becoming a dominant player with huge potential and they made a very smart, strategic acquisition in AeroCare which makes their story even more compelling for investors. I don’t have any position in this stock yet but it’s certainly on my watch list. Unfortunately the stock was up more than 15% on the news that it was buying $AHCO so I’d rather wait for a pullback before jumping in.
$BAND — Bandwidth
Current price = $157.49
Market cap = $3.8 billion
Headquarters = Raleigh, North Carolina
Website = https://www.bandwidth.com/
2020 revenue growth (est.) = +42%
2021 revenue growth (est.) = +39%
Chart: https://chrt.biz/BAND/1907481uiap/chart/
Bandwidth operates as a cloud-based software-powered communications platform-as-a-service (CPaaS). The company operates in two segments, CPaaS and Other. Its platform enables enterprises to create, scale, and operate voice or text communications services across mobile applications or connected devices. Bandwidth serves large enterprises, small and medium-sized businesses, technology companies, and other businesses. Their clients include Google, Microsoft, RingCentral, Zoom and many more [click here]. Recently the company acquired Voxbone to help accelerate their international growth plans [click here].
My take: I really like $BAND and did own the stock earlier this year. The stock has recently pulled back 20–25% from recently highs so if you’re looking for some exposure to the CPaaS market this might be a good time to jump in with $BAND. I put them in the same group with $TWLO and $API because they’re similar but personally I think $BAND has the more attractive valuation in terms of P/S of the three companies. Gross margins are low for both $BAND and $TWLO but growth is still decent. Personally I think every growth investor should consider owning either $BAND or $TWLO in their portfolio although with that said I’m not currently in either but will look to get back in on any bigger pullbacks. I could also argue that $BAND is more attractive because there’s always a chance they get acquired whereas it’s very unlikely anyone is going to buy $TWLO for $65+ billion.
$BRP — BRP Group dba Baldwin Risk Partners
Current price = $29.76
Market cap = $2.4 billion
Headquarters = Tampa, Florida
Website = https://baldwinriskpartners.com/
2020 revenue growth (est.) = +72%
2021 revenue growth (est.) = +76%
Chart: https://chrt.biz/BRP/1907481wrm8/chart/
BRP operates as a global insurance distribution company through four segments: Middle Market, Specialty, MainStreet, and Medicare. The Middle Market segment provides private risk management, commercial risk management, and employee benefits solutions for mid-to-large size businesses and high net worth individuals and families. The Specialty segment operates as a wholesale co-brokerage platform that delivers programs requiring underwriting and placement services. The MainStreet segment offers personal, commercial, and life and health solutions to individuals and businesses in their communities. The Medicare segment provides consultation for government assistance programs and solutions to seniors and individuals through a network of agents. BRP has more than 500,000 clients, a very strong management team and is routinely ranked as one of the top insurance firms in the country.
My take: I have never owned an insurance company and I’m not sure I ever will however if I was going to $BRP would be at the top of my list. It’s hard for me to get excited about insurance and it’s traditionally not an industry with big competitive advantages or barriers to entry but it’s still a massive TAM and clearly $BRP is finding plenty of growth opportunities. If your investment thesis is to find smaller companies leveraging technology to disrupt big boring legacy industries then $BRP might be a perfect fit for your portfolio.
$CRON — Cronos Group
Current price = $8.55
Market cap = $2.9 billion
Headquarters = Toronto, Canada
Website = https://www.thecronosgroup.com/brands.php
2020 revenue growth (est.) = +62%
2021 revenue growth (est.) = +118%
Chart: https://chrt.biz/CRON/1907481xco4/chart/
Cronos operates as a cannabinoid company in the US and internationally. It manufactures, markets, and distributes hemp-derived supplements and cosmetic products through ecommerce, retail, and hospitality partner channels. The company is also involved in the cultivation, manufacture, and marketing of cannabis and cannabis-derived products for the medical and adult-use markets. Its brand portfolio includes Peace Naturals, a global wellness platform; adult-use brands comprise Cove and Spinach; and hemp-derived CBD brands consist of Lord Jones and Peace
My take: I’m still no expert on the cannabis industry and I’m late to the party but it feels like there’s 10x more public weed/cannabis companies now than just a few years ago so it’s hard to know where to start and how to compare them. To be honest my favorite way to invest in this sector is with $GRWG which is a top 15 position in my portfolio (the classic “picks & shovels” investment strategy). However if you want to own one of the growers, brands and/or manufacturers then $CRON is probably a decent place to start but there are plenty of others to choose from. I chose $CRON because I recognized a couple of their brand names but also because they pop up in my growth screeners which made me want to dive a little deeper. It appears they are also working on some brand partnerships with celebrities which is always a good way to build awareness. Maybe $CRON will be the Nike of weed (haha). Taking the bigger picture view I do think that cannabis is going to be a booming industry for the next decade and if you don’t want to pick any individual names (more risk & more reward) then there’s several weed/cannabis ETFs you can choose from including $YOLO $MJJ $THCX $POTX and $MSOS
$EAR — Eargo
Current price = $47.36
Market cap = $1.8 billion
Headquarters = San Jose, CA
Website = http://Eargo.com
2020 revenue growth (est.) = +97%
2021 revenue growth (est.) = +38%
Chart: https://chrt.biz/EAR/1907481xx17/chart/
Eargo develops medical-grade hearing aids and sells them directly to consumers (DTC) off their website. Hearing loss is the third most common medical condition in the U.S., more prevalent than diabetes or cancer. Eargo estimates that the underserved market of people with hearing loss is 43 million adults in the U.S. and more than 465 million adults globally. Eargo hearing aids are nearly invisible, rechargeable, and completely in the canal.
Eargo hearing aids aren’t cheap. Its most basic hearing aid, the Eargo Max costs $1,850, while the Eargo NEO sells for $2,350. The Eargo NEO HiFi, its newest product and the one Gormsen was wearing, goes for $2,950. The company, however, offers a one-time replacement for each device that is lost or damaged. As of recently some Medicare Advantage, Medicaid and commercial insurance programs, as well as some U.S. federal government programs, may cover the whole cost or a portion.
Eargo also provides 0% financing for their hearing aids with payments as low as $103/month. A few years ago my father paid more than $6,000 for his hearing aids so there’s alot of reasons why this DTC model is scalable.
My take: Several weeks ago my Mom mentioned to me how much my Dad’s hearing aids cost, my jaw dropped when she said $6,000+ especially since I knew that these DTC companies existed and were gaining traction. 6 years ago I interviewed the founder of a different DTC hearing aid company on my podcast so I understood the industry and where the challenges were. The biggest problem is the audiologists that make a ton of money by recommending the super high priced hearing aids. Unfortunately hearing loss is a major problem in this country especially as the population ages so as people become more comfortable with the process of buying a hearing aid online then it bodes well for companies like $EAR. I actually started a small position in this company earlier this week so I’m watching it closely for now and will likely add at some point.
$EH — Ehang Holdings
Current price = $13.24
Market cap = $750 million
Headquarters = Guangzhou, China
Website = https://www.ehang.com
2020 revenue growth (est.) = +225%
2021 revenue growth (est.) = +300%
Chart: https://chrt.biz/EH/1907481ygq7/chart/
EHang operates as an autonomous aerial vehicle (AAV) technology platform company. It designs, develops, manufactures, sells, and operates AAVs, as well as their supporting systems and infrastructure for a range of industries and applications, including passenger transportation, logistics, smart city management, and aerial media solutions.
My take: Of all the companies on this list I think $EH must be the riskiest and craziest but also the coolest and most exciting depending on whether you appreciate innovative technologies. Whether you like it or not drones and aerial vehicles will be part of the future with regards to deliveries, logistics and transportation. To be honest I’m still digging into this company and don’t have any position yet but it looks like they might be on the cusp of some massive growth so I wanted to put them on your radar. It’s very likely we don’t see these technologies for commercial use in the US for another 3–4 years but China is more than happy to chart the path as they’ve done with other cutting edge technologies over the years.
$FSLY — Fastly
Current price = $80.39
Market cap = $9.1 billion
Headquarters = San Francisco, California
2020 revenue growth (est.) = +45%
2021 revenue growth (est.) = +42%
Chart: https://chrt.biz/FSLY/1907481z356/chart/
Fastly operates an edge cloud platform for processing, serving, and securing its customer’s applications. The edge cloud is a category of Infrastructure as a Service that enables developers to build, secure, and deliver digital experiences at the edge of the Internet. It is a programmable platform designed for web and application delivery. It serves customers operating in e-commerce, social media, digital publishing, media, entertainment, technology, travel, hospitality, financial services and many more. Below is a list of their bigger enterprise customers.
In the past month Fastly launched their Compute@Edge platform which will help the companies serve their customers and users better with a faster and more secure experience. Those companies can build applications and execute code at the edge — without having to manage the underlying infrastructure.
My take: Anyone that follows me on Twitter knows that I love $FSLY and have been a huge bull for the past 6+ months as the stock rallied from the low $30s into the mid $130s. However back in October the stock dropped 50% on the news that TikTok was leaving them because of the threats made from the Trump administration. This was soul crushing news because TikTok was Fastly’s biggest customer however they left for political reasons, it had nothing to do with Fastly’s best in class products and solutions. In my opinion there’s still a chance that TikTok brings back some or all of their business to $FSLY which would probably give a 20% bump to the stock price. In this space I like $FSLY and $NET the most which both seem to be the leaders in edge computing and network security although I do prefer $FSLY because of their enterprise customer list. I also included $FSLY on this list because $NET’s market cap is over $10 billion. Another reason I’m very bullish on $FSLY for the next few years is because of their recent acquisition of Signal Sciences. This company improves Fastly’s security offerings via Secure@Edge which should be a huge hit with their enterprise customers. I expect both sales teams to have a lot of success cross-selling their services to each other’s enterprise customers. The analysts are a little more conservative on 2021 numbers but I think $FSLY has a good shot at $440–450 million which would be a 50% increase over this year. Even with TikTok gone (for now) there’s not enough attention being paid to Fastly’s customers in the travel and hospitality industry so as they see a rebound in demand it means Fastly and their usage based pricing model will also benefit.
$FUBO — Facebank Group dba Fubo TV
Current price = $27.40
Market cap = $1.8 billion
Headquarters = New York, New York
Website = https://www.fubo.tv/welcome/channels?irgwc=1
2020 revenue growth (est.) = +80%
2021 revenue growth (est.) = +90%
Chart: https://chrt.biz/FUBO/1907481zxmw/chart/
Fubo 2020 Q3 earnings [click here]
Fubo is a streaming TV platform that focuses on live sports, news, food, travel, home and design, and entertainment. FuboTV still calls itself sports-first but they have expanded their channel lineup in an effort to target the “cord cutters” offering a selection of major cable channels that can be streamed through smart TVs, mobile devices and tablets. Recently the company expanded their plan options starting at $59.99 per month and including networks like ABC, ESPN, Disney and dozens of others. Fubo is available on all many streaming platforms and smart TV services like Roku, Chromecast, Amazon FireStick, Xbox One and more.
My take: When I first heard about the recent $FUBO IPO and looked into the financials I was quickly turned off by the low gross margins however after digging more into the company, talking to some friends in the media industry and thinking about my own investment thesis I quickly warmed up to the company and even started a small position this week. If we believe that “cord cutting” will continue which means homeowners get rid of their cable provider and switch to streaming services like Fubu, YouTube, Netflix, Hulu, etc and watch them across their smart TVs or use services like $ROKU then $FUBO has a great opportunity over the next few years to be a big winner alongside the others I just mentioned. The stock has had a nice run recently so you might not want to chase or do what I did which is start a small position and hope for a pullback to add more.
$FUTU — Futu Holdings
Current price = $43.08
Market cap = $5.8 billion
Headquarters = Hong Kong
Website = https://www.futuholdings.com
2020 revenue growth (est.) = +175%
2021 revenue growth (est.) = +60%
Chart: https://chrt.biz/FUTU/19074820jax/chart/
Futu operates as a mobile-first investment and wealth management platform in Hong Kong, China, the United States, and internationally. The company’s platform offers investing services including trading in stocks, warrants, options and ETFs along with wealth management services, which offers various products such as money market accounts, fixed income, and equity fund products.
In my opinion this could be the next Robinhood or Charles Schwab of the Asian markets. I also like that Tencent is a significant equity owner and that Sequoia and Matrix were early VC investors. The company also has an office in Silicon Valley.
My take: I first saw this company come through one of my screeners a couple months ago but foolishly ignored it because it was based in Hong Kong. At the time it was trading in the low $30s which would have been an ideal time to buy it. More recently I heard about it on the Pounding the Table Podcast and decided to take a deeper look. I really liked what I saw and decided to start a position a couple weeks ago in the high $40s because I think this could be a $100 stock next year. Since I made my first purchase the stock has drifted down into the low $40s but I’ve been adding the entire time so my cost basis is around $45 and $FUTU is now a top 12 position for me. I honestly didn’t intend to let this position get so big but I feel very good about this company especially knowing that Tencent is a major shareholder. Tencent seems to have the Midas Touch, they own 20–25% of $SE which is another one of my top 5 holdings.
$INSP — Inspire Medical Systems
Current price = $191.50
Market cap = $5.1 billion
Headquarters = Golden Valley, Minnesota
Website = https://www.inspiresleep.com/
2020 revenue growth (est.) = +38%
2021 revenue growth (est.) = +54%
Chart: https://chrt.biz/INSP/190748217ws/chart/
Inspire Medical Systems is a medical technology company, focusing on the development and commercialization of minimally invasive solutions for patients with obstructive sleep apnea (OSA).
The company also develops a novel, a closed-loop solution that continuously monitors a patient’s breathing and delivers mild hypoglossal nerve stimulation to maintain an open airway.
My take: Medical device companies always make me nervous because I don’t follow the industry very closely so it’s hard for me to know who the big competitors are and how their products compare. I also have very limited knowledge about the regulatory landscape, insurance reimbursements, etc so I’m including this company because everything I’ve seen and read looks very promising and I know the sleep apnea market relatively well since several of my friends use CPAP machines and hate them. I’m going to mention this company to them and see if they’ve looked into these alternative solutions before. I know some people get scared off by “minimally invasive” which is fair.
$IRTC — iRhythm Technologies, Inc.
Current price = $192.21
Market cap = $5.5 billion
Headquarters = San Francisco, California
Website = https://www.irhythmtech.com/
2020 revenue growth (est.) = +24%
2021 revenue growth (est.) = +42%
Chart: https://chrt.biz/IRTC/190748229zg/chart/
iRhythm Technologies is a digital healthcare company that provides ambulatory electrocardiogram (ECG) monitoring products for patients at risk for arrhythmias. It offers Zio service, a cardiac monitoring solution that combines a wire-free, patch-based, and wearable biosensor with a cloud-based data analytic platform to help physicians monitor patients and diagnose arrhythmias.
My take: If you’re looking for a smaller medical device company with a great product that customers seem to really like then take a look at $IRTC. The stock was down 20% yesterday because of growing concerns about insurance coverages/reimbursement from Medicare and Medicaid. The stock actually closed on Tuesday at $240 then dropped all the way down to $165 yesterday morning before rebounding to $192. I was already planning to include this stock on my list prior to yesterday’s big drop so perhaps the entry price is more attractive now or perhaps this stock could drift lower. I honestly don’t know but it’s a name I’ll be watching closely in the coming weeks.
$KC — Kingsoft Cloud
Current price = $41.30
Market cap = $9 billion
Headquarters = Beijing, China
Website = https://en.ksyun.com
2020 revenue growth (est.) = +80%
2021 revenue growth (est.) = +65%
Chart: https://chrt.biz/KC/19074822uew/chart/
Kingsoft provides cloud hosting and infrastructure services in China. The company offers public cloud services to customers in multiple verticals, including gaming, video, streaming, AI, e-commerce, education, healthcare, financial services and others.
My take: We all know that companies are moving all of their applications and date into the cloud at a record pace. In the US that market is dominated by Amazon AWS, Microsoft Azure and Google Cloud (with a few others). In China the three equivalents to that would be Alibaba, Tencent and Kingsoft. All three of them are growing their cloud businesses by more than 50% with Kingsoft being the smallest and purest way to play this secular trend so that’s why I like it and that’s why I started a position this week in $KC. I understand this is a speculative stock (despite the $9 billion market cap) but there’s still a lot to get me excited about and think this could be a $50 billion company in 4–5 years. The stock is only trading at 5.6x 2021 sales although the gross margins in this business are low compared to traditional SaaS businesses. Given the size of $BABA and $TCEHY I do wonder if one of them will end up acquiring $KC just to get them out of the way or perhaps some other Asian conglomerate gobbles them up.
$LSPD — Lightspeed POS Inc.
Current price = $58.12
Market cap = $5.8 billion
Headquarters = Montréal, Canada
Website = https://www.lightspeedhq.com/
2020 revenue growth (est.) = +62%
2021 revenue growth (est.) = +60%
Chart: https://chrt.biz/LSPD/19074823hc5/chart/
Lightspeed POS (point of sale) is a SaaS platform for small and midsize businesses including retailers, restaurants, and golf courses that enables the business to engage with consumers, manage operations, accept payments, and much more. The company’s platform covers the front-end such as point of sale, omni-channel engagement, home delivery, order management and loyalty programs. The platform also covers the back-end of the business like accounting, inventory, scheduling, membership, workflow, reporting, analytics, and real-time dashboards. Lightspeed also sells a suite of third-party hardware products to complement its software solutions for the retail and hospitality segments, such as customer facing displays, stands, barcode scanners, receipt printers, cash drawers, payment terminals, and an assortment of other accessories. Lightspeed offers 5 pricing plans, depending on what features your business needs. The plans start at just $79 per month (+$29 per month for each register) when you also integrate Lightspeed Payment Solutions. Lightspeed has 900+ employees across 14 global offices, customers in 100+ countries and has completed multiple acquisitions to expand their product offerings and customer list.
My take: I actually started a position in Lightspeed this week after digging into the company and better understanding what they do and who they serve. I’ve been looking for some stocks that could give me huge growth potential while also giving me exposure to the “recovery” sectors and I think $LSPD is one of them. They offer such a comprehensive platform for small businesses and they do it at a very fair price. There’s a lot to like about this company and I don’t think it’s getting enough attention from institutional investors, perhaps because it’s a Canadian based company (like Shopify) so once that changes this stock could have a very strong 2021.
$MMYT — MakeMyTrip
Current price = $24.98
Market cap = $2.6 billion
Headquarters = Gurugram, India
Website = https://www.makemytrip.com/
2020 revenue growth (est.) = -75%
2021 revenue growth (est.) = +225%
Chart: https://chrt.biz/MMYT/190748246kv/chart/
MakeMyTrip is an online travel company offering products and solutions in a dozen or so international markets but India is their biggest. The company operates in multiple verticals including Air, Hotel, Bus, Train, Cruise, Taxi, Chartered, Groups and more. The company allows travelers to research, plan, book, and purchase a range of travel services and products through their different websites: makemytrip.com, goibibo.com, redbus.in, makemytrip.com.sg, and makemytrip.ae — that company also works with other distribution channels such as call centers, travel stores, and travel agents’ network. As of March 31, 2020 the company had 14 company-owned travel stores and 150 franchisee-owned travel stores.
My take: I’m tempted to take a position in this company because they should have a very strong rebound in 2021 once people around the world start traveling again. $MMYT looks to me like they are the Expedia of the emerging markets especially India where more people are moving into the middle class thus allowing more leisure travel. It’s on my watchlist for now. If you know this company well please feel free to shoot me a message and give me some additional insights.
$NFE — New Fortress Energy
Current price = $42.66
Market cap = $7.2 billion
Headquarters = New York, NY
Website = https://www.newfortressenergy.com/
2020 revenue growth (est.) = +152%
2021 revenue growth (est.) = +143%
Chart: https://chrt.biz/NFE/1907482gdls/chart/
New Fortress Energy operates as an integrated energy infrastructure company. They fund, build, and operate natural gas infrastructure and logistics to deliver energy solutions that enhance environmental stewardship and transform local industries and communities. New Fortress Energy was founded in 2014 by Wes Eden with the belief that access to affordable, reliable, cleaner energy is not a privilege, but a human right. New Fortress identifies places around the world where affordable, reliable, cleaner energy is in short supply. Then they build and operate LNG import terminals and facilities to supply natural gas locally, creating access to a better energy source. They also help finance, design, and build the gas-fired power generation and industrial facilities to help customers convert to natural gas.
My take: I have mixed feelings on this one because I’m certainly no expert on clean energy or natural gas however everytime I do a stock screener looking for high-growth stocks this one always comes through so I felt compelled to finally dig into it. The company does look interesting and they clearly have a mission of making the world a better place by bringing clean, affordable energy to all parts of the world which you have to respect. To be honest the growth projects look so extreme I’d definitely be a little cautious but feel free to dig in deeper and let me know what you think.
$NIU — Niu Technologies
Current price = $29.59
Market cap = $2.2 billion
Headquarters = Beijing, China
Website = https://www.niu.com/en/
2020 revenue growth (est.) = +25%
2021 revenue growth (est.) = +80%
Chart: https://chrt.biz/NIU/1907482h6eo/chart/
Niu Technologies designs, manufactures and sells smart electric-scooters across Asia but primarily in China. The company offers NQi, MQi, UQi, and Gova series e-scooters; RQi and TQi series urban commuter electric motorcycles as well as NIU Aero series professional mountain and road bicycles under the NIU brand name. NIU sells and services its products through city partners and franchised stores as well as third-party e-commerce platforms and the company’s online store. Currently NIU operates through 235 city partners and 1,050 franchised stores in approximately 180 cities in China plus 29 distributors across 38 countries.
My take: This company is a great way to invest in micro-mobility which is a huge theme throughout Asia and now other parts of the world thanks to the pandemic. This stock is probably high risk but also high reward versus some of the other China stocks you could buy like $BABA $JD $PDD etc. The company appears to have done a nice job getting distribution but now we have to see if they can deliver the revenues.
$OCFT — OneConnect Financial Technology Co.
Current price = $21.80
Market cap = $8.5 billion
Headquarters = Shenzhen, China
Website = https://www.ocft.com/index.php?s=en/
2020 revenue growth (est.) = +52%
2021 revenue growth (est.) = +58%
Chart: https://chrt.biz/OCFT/1907482hriu/chart/
OneConnect Financial provides cloud-platform-based Fintech solutions, information and operating support services for financial institutions across China. OneConnect is the largest technology-as-a-service platform for financial institutions in China by number of customers. The platform provides more than 50 cloud-native products that can be deployed on a modular basis to quickly respond to customer requirements or combined to deliver end-to-end solutions. OneConnect focuses on 12 different verticals across the financial services industry including retail banking, risk management, SMB/SME financing, auto insurance, asset management, asset liability, insurance sales, blockchain and AI powered customer service [read more].
The company also operates: Regtech, an end-to-end regulatory solution to help enterprises automate and digitalize their operations; GammaO, an open API platform-as-a-service; and Blockchain network-as-a-service that enables their customers to create their own blockchain-based networks.
My take: Investing in China inherently carries some extra risk but there’s no denying the growth potential with this company given the industries they sell to and how quickly financial services, banking, insurance and asset management are growing throughout Asia. If you want to invest in China but want to stay away from e-commerce and electric vehicles then this might be a stock to consider. Personally I think $OCFT is one of the smarter, safer ways to invest in China.
$ONEM — 1Life Healthcare dba OneMedical
Current price = $34.82
Market cap = $4.5 billion
Headquarters = San Francisco, California
Website = https://www.onemedical.com/
2020 revenue growth (est.) = +32%
2021 revenue growth (est.) = +32%
Chart: https://chrt.biz/ONEM/1907482icy6/chart/
OneMedical operates a membership-based primary care platform (memberships start at $199 per year). Their mission statement is to “To transform healthcare for all through a human-centered, technology-powered model”.
OneMedical has developed a healthcare membership model based on direct consumer enrollment, as well as employer sponsorship. Membership includes the ability to text their PC doctors, schedule same-day appointments, video chat, requesting prescription renewals, 24/7 access to virtual care and access into the company’s digital health and information platform. The membership model includes seamless access to digital health services paired with inviting in-office care routinely covered under health insurance programs. At the start of 2020, OneMedical had approximately 90 locations across 9 markets with 422,000 members and 7,000 enterprise clients including companies like Google and Airbnb. The company has focused their efforts on the major cities like San Francisco, Boston, Chicago, Los Angeles, New York, Seattle and DC [see all locations].
My take: One of my college friends was an early employee at OneMedical so I’ve known about this company for over a decade even though they came public less than a year ago. I have a dozen friends that are OneMedical members and they truly love this company. OneMedical is a great example of why there’s so much opportunity for companies in old, slow moving industries like healthcare that decide to adopt technology and innovation and make it a core part of their business model.
$OZON — Ozon
Current price = $42.81
Market cap = $7.7 billion
Headquarters = Nicosia, Cypus
Website = https://www.ozon.ru/
2020 revenue growth (est.) = +80%
2021 revenue growth (est.) = +70%
Ozon is an online marketplace connecting buyers and sellers throughout Russia. The company offers products in various categories that include electronics, home and decor products, children’s goods, fast moving consumer goods, fresh food, and car parts. It also manages an online marketplace that enables third-party sellers to offer their products to consumers on its mobile apps, as well as ozon.ru and ozon.travel websites. In addition, the company provides advertising services and payment solutions to vendors and third-party sellers.
Some investors are already calling Ozon the “Amazon of Russia” which might be true given how fast they are growing and how fast they are investing in logistics and fulfillment (although Amazon is a $1.6 trillion company so please keep things in perspective). Ozon has already said they are likely to spend the proceeds from their recent IPO to add 2.7 million square feet of distribution space and open five new fulfilment hubs. The company has already developed a nationwide logistics infrastructure consisting of nine fulfillment centers, 43 sorting hubs, 7,500 parcel lockers, 4,600 pickup points, and 2,700 couriers.
Here’s a recent interview with the CEO on CNBC [click here]
My take: I love ecommerce companies in general, I believe there are massive secular tailwinds to keep this sector growing for many years to come. Given my desire to own ecommerce companies on every continent as my favorite way to invest in international growth then it only makes sense to have some $OZON in my portfolio. I already own $ETSY $SHOP $MELI $SE $BABA $JMIA $FTCH
$PRPL — Purple Innovation
Current price = $29.75
Market cap = $1.8 billion
Headquarters = Lehi, Utah
Website = http://Purple.com
2020 revenue growth (est.) = +56%
2021 revenue growth (est.) = +30%
Chart: https://chrt.biz/PRPL/1907482lxj0/chart/
Purple is a “sleep company” that designs and manufactures mattresses, pillows, cushions, sheets, and blankets. The company sells its products through direct-to-consumer online channels, retail brick-and-mortar stores, wholesale partners, and third-party online retailers, as well as through its factory outlet and the company owned showrooms. The bulk of the company’s revenues still come from their Purple mattresses which start at $1050 (Queen) and go up to $2800 (Queen) for the Purple Hybrid Premier mattress.
My take: I am worried about the “mattress wars” since there’s probably 10–12 DTC competitors but Purple has one of the best products in the industry plus the size and scale to keep growing especially as more people keep moving from cities into the suburbs and want to upgrade their comforts because we all know that sleep is extremely important to our mental and physical well-being. I’m actually in the market for a new mattress and Purple is at the top of that list.
$RPD — Rapid7
Current price = $76.26
Market cap = $3.9 billion
Headquarters = Boston, Massachusetts
Website = https://www.rapid7.com/
2020 revenue growth (est.) = +25%
2021 revenue growth (est.) = +20%
Chart: https://chrt.biz/RPD/1907482n1rh/chart/
Rapid7 is a cyber security company providing everything from threat detection and response to endpoint analytics to API protection to workflow insights. The company offers a cloud-native platform that enables customers to create and manage analytics-driven cyber security risk management programs. Its platform include vulnerability management solutions comprising InsightVM that is designed to provide a way to collect vulnerability data, prioritize risk, and automate remediation; InsightIDR, an incident detection and response solution; InsightAppSec provides application security testing that analyzes web applications for security vulnerabilities; and InsightConnect, a SOAR solution that is used by security professionals. The company’s other products include Nexpose, an on-premise version of company’s vulnerability risk management solution; AppSpider, an on-premise version of company’s application security testing solution; Metasploit, a penetration testing software solution; and InsightOps that enables organizations to store and search data in real time. Rapid7 offers their products through software licenses, cloud-based subscriptions, and managed services. The company serves customers in many industries including technology, energy, financial services, healthcare and life sciences, manufacturing, media, retail, education and government. The company has customers in the Americas, Europe, Middle East, Africa, and Asia Pacific.
My take: I prefer CrowdStrike which is a top 5 position for me but the market cap is over $35 billion whereas Rapid7 is much smaller (under $4 billion) and could be an acquisition target someday. If you are looking for a smaller company in the cyber security industry this is definitely a company to consider.
$SABR — Sabre Corp
Current price = $11.56
Market cap = $3.7 billion
Headquarters = South Lake, Texas
Website = https://www.sabre.com/
2020 revenue growth (est.) = -65%
2021 revenue growth (est.) = +82%
Chart: https://chrt.biz/SABR/1907482oj51/chart/
Sabre is a technology solutions provider to the $8 trillion global travel, tourism and hospitality industries. In many ways they are the backend data source/platform that powers these massive industries. The company processes more than 1.1 trillion system messages each year, including 100,000 messages per second during peak times and 1.5 billion daily API requests. More than 12 billion shopping requests are processed through Sabre annually and more than one billion people use Sabre technology every year to plan, book and experience travel. It operates in three segments: Travel Network, Airline Solutions, and Hospitality Solutions. Sabre travel marketplace transacts more than $120 billion of travel spend per year. Sabre has joint ventures and distribution partnerships across the globe [read more].
My take: As the travel and hospitality industries rebound in 2021, I believe $SABR could have a very strong year. I would rather get exposure to the recovery sectors via a $SABR versus owning the airlines, hotels, etc.
$SLQT — SelectQuote
Current price = $21.36
Market cap = $3.5 billion
Headquarters = Overland Park, Kansas
Website = http://www.SelectQuote.com
2020 revenue growth (est.) = +62%
2021 revenue growth (est.) = +35%
Chart: https://chrt.biz/SLQT/1907482pdlm/chart/
SelectQuote, Inc. operates a technology-enabled, direct-to-consumer distribution platform that sells a range of insurance policies to consumers from various insurance carriers. The company operates through four segments: Senior, Life, Auto and Home. It’s basically a lead generation service for insurance companies.
My take: SelectQuote went public just 6 months ago and unfortunately I didn’t give it much attention or perhaps I would have realized this company has much more growth than one would expect. As I mentioned earlier, insurance is not the sexiest industry but it is huge and impacts almost every single adult in the country from life to auto to home or all three of them. I’m not in this stock yet but I do love companies leveraging technology, digital marketing, artificial intelligence and big dataI to disrupt big boring legacy industries like insurance so I’ll be keeping a close eye on $SLQT.
$SWAV — Shockwave Medical
Current price = $86.25
Market cap = $3 billion
Headquarters = Santa Clara, California
Website = https://shockwavemedical.com/
2020 revenue growth (est.) = +53%
2021 revenue growth (est.) = +92%
Chart: https://chrt.biz/SWAV/1907482stof/chart/
ShockWave is a medical device company that develops and commercializes intravascular lithotripsy technology to treat calcified plaque in patients with peripheral vascular, coronary vascular, and heart valve diseases. The company offers M5 catheters for treating above-the-knee peripheral artery disease; C2 catheters for treating coronary artery disease; and S4 catheters for treating below-the-knee peripheral artery disease. It serves interventional cardiologists, vascular surgeons, and interventional radiologists through sales representatives and sales managers, and distributors.
My take: I’m not going to pretend that I’m an expert in this industry or truly understand this company’s products (yet) but I did spend a couple hours reading about Shockwave and I’m pretty impressed so far or I would not have included them on this list. Knowing how many millions of people suffer from vascular and coronary diseases makes me think Shockwave could grow at 50–60% per year for many years to come assuming they have the best product in the market (which I’m still trying to figure out). I have a few friends in the medical field so I’m planning to speak with them in the next week or so in hopes they can provide me with some additional information or insights on this company. In the past few days this stock pulled back from $101 down to $84 so there’s a decent chance I grab a few shares in the mid $80s just to start a position while I keep doing my due diligence. As you can probably tell I’m trying to add more non-tech growth stocks to my portfolio.
$TTCF — Tattooed Chef
Current price = $15.42
Market cap = $1 billion
Headquarters = Costa Mesa, California
Website = https://tattooedchef.com
2020 revenue growth (est.) = +74%
2021 revenue growth (est.) = +52%
Chart: https://chrt.biz/TTCF/1907482teif/chart/
Ittella International, LLC provides plant-based food products to fit into various lives, routines, and diets. Its principal products include ready-to-cook bowls, zucchini spirals, riced cauliflower, acai and smoothie bowls, and cauliflower pizza crusts, which are available in the frozen food sections of retail food stores across the United States. The company also sells its products online.
My take: Several of the people I follow on Twitter had been banging the table on $TTCF over the past couple months but it was a SPAC deal and too many of them had traded poorly after their merger so I decided to stay away. Turns out I was right because the stock has since pulled back from $28 to under $16 but now I believe the risk/reward is extremely appetizing (pun intended). Over the past couple weeks I have dug into this company, I have tried their products and I’m thoroughly impressed with the quality. I actually had their cauliflower pizza for dinner last night because I’m addicted. I prefer their pizza over regular pizza because it’s less filling but just as tasty. In my opinion if you want to invest in the “plant based foods” theme/trend you’re better off doing it with $TTCF than you are with $BYND which is already sporting a $9 billion valuation. I believe $TTCF outperforms $BYND over the next couple years as this small cap gets more attention from retail and institutional investors. Their food is not cheap but it’s very high quality, it’s convenient and it’s still more affordable than going out to a restaurant.
$VRM — Vroom
Current price = $33.65
Market cap = $4.4 billion
Headquarters = NYC, New York
Website = https://www.vroom.com/
2020 revenue growth (est.) = +15%
2021 revenue growth (est.) = +85%
Chart: https://chrt.biz/VRM/1907482tzzw/chart/
Vroom, Inc. operates an e-commerce platform for buying, selling, and trading of new and used cars in the United States. It also offers financing solutions.
My take: Vroom has had a volatile year that included their IPO in June 2020. After the IPO the stock ripped higher to $75 and has since fallen down into the mid $30s. In my opinion expectations are very low for this company right now so there’s potential upside over the next 12–18 months. I don’t have a position yet but I’m getting close to starting one. If you believe that more cars will be bought and sold over the internet in the coming years then you really have two options to invest in that theme which is Carvana ($40 billion market cap) and Vroom ($4.4 billion market cap). In my opinion I think both companies have a bright future post-pandemic especially with more people moving out of cities and into the suburbs which should increase the number of cars that households will own. I also believe less people will want to commute into cities via public transportation which could also push up the demand for new and used cars ie Vroom. It’s very likely that Carvana is the better company long term however $CVNA is up 150% YTD while $VRM is down more than 50% from the early September highs.
Other stocks that were strongly considered but not included for various reasons. Some of them might make my next list because they’re all on my watchlist now.
$ACAD — Acadia Pharmaceuticals
$AFYA — Afya Ltd.
$ARCE — Arco Platform
$AEYE — AudioEye
$BIGC — BigCommerce
$BLNK — Blink Charging
$BYND — Beyond Meat
$CDLX — Cardlytics
$CLSK — CleanSpark
$CRSP — Crispr Therapeutics
$DAO — Youdau
$EHTH — eHealth
$EXPI — eXp World Holdings
$FLGT — Fulgent Genetics
$FROG — Jfrog
$FRPT — Freshpet
$FTHM — Fathom Holdings
$GAN — Gan Ltd.
$GBT — Global Blood Therapeutics
$GSHD — Goosehead Insurance
$HQY — HealthEquity
$IPOB — OpenDoor
$JMIA — Jumia
$JYNT — Joint Chiropractic
$KNDI — Kandi Technologies
$KNSL — Kinsale Capital
$LMND — Lemonade
$LMPX — LMP Automotive
$LPRO — Open Lending
$MGNI — Magnite
$MWK — Mohawk
$MXL — Maxlinear
$NNOX — NanoX
$PD — PageDuty
$PLAN — Anaplan
$PLMR — Palomar Holdings
$QFIN — 360 DigiTech
$SII — Sprott
$SMAR — SmartSheet
$SPWR — SunPower
$UPWK — UpWork
$WKHS — Workhorse Group
