Shiba Inu (CRYPTO:SHIB) — the “Dogecoin killer” — has been on an epic run. As of this writing, the meme coin has skyrocketed practically 600% for the reason that begin of October alone and is up effectively over 3,500,000% since inception final summer season. This return features a greater than 40% fall from its all-time excessive simply weeks in the past.
Meme cash like Shiba Inu might create mind-boggling wealth in a brief time period, however they’ll additionally flip towards you simply as shortly. Searching for a longer-term guess that would additionally create game-changing funding returns? Three Idiot.com contributors assume Lemonade (NYSE:LMND), Common Show (NASDAQ:OLED), and Marqeta (NASDAQ:MQ) are value a glance. Here is why.
Making an attempt a coup in insurance coverage
Nicholas Rossolillo (Lemonade): Over a yr since its preliminary public providing (IPO) in the summertime of 2020, Lemonade has made fairly the roundtrip. Shares are down 8% since their debut in public commerce, however down 67% from all-time highs notched in January 2021. Even for particular person shares, which may swing wildly up and down, Lemonade’s growth and bust to date have been spectacular.
However sufficient in regards to the inventory, let’s speak about Lemonade the enterprise. The corporate is rising its variety of insured prospects at a fast tempo, up thus far primarily by providing renters, home-owner, pet, and life insurance coverage. Whole prospects elevated 48% yr over yr to over 1.36 million on the finish of the third quarter of 2021, and in-force premium (the worth of lively insurance coverage insurance policies) was up 84% yr over yr to $347 million. That is nonetheless a small insurance coverage upstart attempting to make use of expertise to disrupt a massive global industry.
The corporate simply made its greatest new-product launch but, Lemonade Automobile, to go after the massive U.S. auto insurance coverage market. To speed up its nationwide rollout, Lemonade is buying Metromile in an all-stock deal value about $500 million on the time of the announcement (or simply over $200 million when subtracting Metromile’s web money on steadiness). Metromile itself has not fared effectively since its personal IPO early in 2021, however plugging its auto insurance coverage licenses and driver information into Lemonade’s machine studying platform might be fascinating.
As of this writing, Lemonade’s enterprise worth is at simply $2.7 billion. The corporate operates at a steep loss (free money movement was adverse $102 million by means of the primary 9 months of 2021), so this aspiring insurance coverage disruptor is not for the faint of coronary heart. Nonetheless, flush with over $1 billion in money and equivalents and no debt, Lemonade might be an unbelievable development story if it could possibly proceed to increase within the years to return.
This expertise has a variety of untapped market share to seize
Anders Bylund (Common Show): Shiba Inu’s quarter-hour within the limelight are virtually over, as I see it. On the similar time, Common Show is barely getting began on its long-term development story — and the inventory is on a hearth sale.
The developer and supplies reseller behind natural light-emitting diode (OLED) screens simply posted one other spectacular earnings report. Within the third quarter of 2021, gross sales rose 23% yr over yr to $144 million and earnings elevated by 14% to $0.97 per diluted share. Your common Wall Avenue analyst was searching for $146 million and $1.09 per share, respectively. The miss triggered a modest sell-off on UDC’s already reasonably priced shares, and the inventory continues to be greater than 6% cheaper at this time compared to the day earlier than this earnings report.
Skeptics would possibly argue that the report uncovered critical flaws in UDC’s enterprise, and that traders ought to keep away from the inventory. I humbly disagree with that notion.
What Common Show’s latest reviews have proven, together with the recent third-quarter replace, is that the corporate is rising in a time of industrywide provide chain challenges. On the similar time, the addressable marketplace for OLED screens and lighting panels continues to increase and the corporate’s screen-building companions are constructing out their manufacturing amenities so as to exploit this distinctive alternative.
For instance, Common Show’s earnings name confirmed that LG Show (NYSE: LPL) is transport roughly 8 million big-screen OLED tv units this yr, up from 4.5 million in 2020. LG needs to spice up its TV-screen manufacturing even additional in 2022. The long-term development alternative for power-efficient OLED screens past that time stays monumental, since this expertise accounts for simply 3% of the TV units offered at this time.
So that you’re getting in on the bottom ground of Common Show’s thrilling development story whereas Shiba Inu fades into the cryptocurrency market‘s background. This inventory trades 34% under January’s all-time highs and fewer than 6% above its 52-week lows proper now. It is time to pounce on Common Show inventory whereas it is hanging out in Wall Avenue’s discount bin.
This inventory has crypto publicity, but in addition advantages from different thrilling fintech developments
Billy Duberstein (Marqeta): Cryptocurrency is a brand new and thrilling trade, and altcoin Shiba Inu is at the moment having its second within the solar, however let’s face it: Shiba Inu is a extremely speculative guess.
But whereas anybody altcoin could be dangerous, a number of thrilling new fintech companies have all of the potential upside of cryptocurrencies, with out single-coin danger. One such firm is card-issuing fintech Marqeta, which simply reported earnings on Wednesday.
Marqeta had its IPO again in June, nevertheless it’s an 11-year-old firm and first-mover in fashionable card issuing. Administration touts that first-mover benefit over new entrants, whereas additionally having higher agility and tech-savvy than legacy monetary giants. Primarily based on its latest spectacular earnings beat, administration might very effectively be proper about that.
Due to its superior utility programming interfaces (APIs), Marqeta’s platform permits corporations to construct versatile playing cards, each bodily and digital. Purchasers vary from massive U.S. banks like JPMorgan Chase, which makes use of Marqeta to assist ship digital variations of its company and enterprise playing cards; tech platforms like DoorDash, which use Marqeta to load particular order quantities onto shopper playing cards; purchase now, pay later fintechs like Afterpay; and extra just lately, cryptocurrency-related corporations resembling Coinbase World, that are issuing new card merchandise with crypto-linked spending and rewards applications.
Final quarter, income grew 56%, forward of analyst expectations, and losses per share have been additionally higher than anticipated. Importantly, whereas the corporate continues to be closely investing in working bills to seize its development alternative, gross margin expanded by three share factors over the prior-year quarter. That is an incredible signal for future margins.
Whereas Marqeta will get an outsize portion of income from a single shopper in Sq., Sq.’s focus of income decreased from 72% a yr in the past to 68% final quarter, and prospects outdoors the highest 5 grew their funds quantity a whopping 226%. Even for the reason that quarter ended, Marqeta already introduced a number of impressive new customer wins in October, which bodes effectively for the longer term.
Marqeta is not low cost, buying and selling at over 20 instances subsequent yr’s earnings estimates. However its main place within the enormous addressable market of card funds offers it long-term upside usually related to crypto, however with extra diversification throughout the broader fintech panorama.
This text represents the opinion of the author, who might disagree with the “official” suggestion place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us grow to be smarter, happier, and richer.