5 unstoppable trends to invest $ 10,000 in right now
IInvesting becomes easier if you skate – as the old hockey saying goes – where the puck goes rather than where it is on the ice. A good way to fill your portfolio with potential winners is to assess emerging trends that have the potential to gain popularity in the years to come. I don’t mind sharing my crystal ball here, and I’ll also be discussing at least one stock idea for each of the five trends that seem unstoppable to me at this point.
I see the suburbs, the legalization of gambling and cannabis, telehealth, and the humanization of pets as five trends that will continue to gain momentum. Let’s also take a closer look at ways to invest in these evolutionary if not revolutionary movements.
Image source: Getty Images.
One thing that became clear in the early days of the pandemic is that companies were on the verge of relaxing their office requirements for work that could be done remotely. People fled expensive rentals in big cities to suburban markets where they could get more real estate for their money. I wrote about the suburban trend 15 months ago, coming up with 18 niche investing ideas. Many people have started to return to metro digs, but more flexible company policies mean the suburban trend is here to stay.
We’ve seen home builders, single-family rental aggregators, and even furniture makers thrive in this climate. Two off the beaten track values that thrive in this trend are Trex (NYSE: TREX) and Tractor supply (NASDAQ: TSCO). Trex is the leading manufacturer of wood decking materials. Trex decks last longer than traditional wood decks with much less maintenance. As people move into homes with real gardens, expanding their outdoor living space becomes an easy consideration for home improvement.
Tractor Supply is a play about recreational agriculture. Many people who leave the city for the countryside find themselves with a lot of land that they can use for raising animals or growing their own food. Tractor Supply is a titan in this market with nearly 2,000 stores geared to rural lifestyles. Last year has been solid, but she’s doing a great job of building on that momentum. The 13.1% increase in the comps he posted in his last quarter comes on top of a 26.8% increase from the same period a year earlier.
Legalization of the game
Whether it’s tax-hungry states or simply better guarantees in place to catch someone when betting gets dangerously addicting, the game is no longer limited to one-armed bandits in Las Vegas. It has never been easier to raise the stakes by watching live sporting events, and one title I really love here is DraftKings (NASDAQ: DKNG).
DraftKings started out as a specialist in fantasy sports, with people putting their ability to guess the field performances of individual players into play. It has become a full-fledged sports betting operator. Pete Rose must shake his head when he sees DraftKings teaming up with teams and leagues for in-game marketing deals. % for the next year. Don’t bet against DraftKings, even if the stock is down sharply from its previous highs.
Something that may seem even more surprising than the proliferation of gambling in recent years is the widespread acceptance of cannabis products. As more states legalize marijuana and other jurisdictions begin to reap the benefits of cannabis, many publicly traded companies are starting to light up.
A more conservative game in this area is Innovative industrial properties (NYSE: IIPR). It acquires and operates regulated cannabis facilities that it leases to state-licensed operators, providing more than 6 million rentable square feet of industrial buildings and specialized greenhouses. It’s a way of playing on the growing popularity of cannabis, by hanging on to the best performers in the country.
The benefit may be limited to the rent it receives, but its early success has made it a savvy buyer of small specialists to help it grow. Innovative Industrial Properties is structured as a Real Estate Investment Trust (REIT), passing most of its profits to its shareholders. That translates to a relatively low return of 2.5% right now, but the increases have been substantial every year.
Another pandemic trend that is not going to go away any time soon is telemedicine. Teladoc (NYSE: TDOC) is a business that skyrocketed in the early months of the COVID-19 crisis, when it became clear that people weren’t going to see doctors in offices outside of emergencies. Teladoc has corrected heavily this year as medical buildings are open again, but that doesn’t mean telehealth is fading away. The 3.9 million visits it recorded in its most recent quarter is 37% more than its services a year earlier.
No one likes going to a crowded waiting room to see a doctor, and now that we know telehealth can be performed remotely for many basic visits. Teladoc’s ability to provide one-on-one virtual care for primary and mental care – along with the acquisition of Livongo Health last year that makes it a leader in chronic disease management makes it an oversold stock with a bright future.
Humanization of companion animals
We adopted many pets last year when the pandemic made it clear that we would have plenty of time to take care of them at home, and these dogs and cats are going to be around for a long time. Two actions that I like here are Freshpet (NASDAQ: FRPT) – a supplier of fresh pet food – and an online retailer soft (NYSE: CHWY).
Freshpet sets itself apart with its fleet of branded refrigerators that you will find in many leading supermarkets and in most major retail chains. Chewy has managed to carve out a niche in ecommerce with their solid customer service and attractive subscription discounts. Pet stocks declined in 2021, but our furry friends are only getting bigger and hungrier.
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Rick Munarriz owns Freshpet, Innovative Industrial Properties, Teladoc Health and Tractor Supply. The Motley Fool owns and recommends Chewy, Inc., Freshpet, Innovative Industrial Properties, Teladoc Health, and Trex. The Motley Fool recommends Tractor Supply. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.