Shopping for penny shares could be tempting, as a result of even a small improve in share worth can ship your funding skyrocketing. However the issue is that the reverse can occur simply as simply and have the other impact. Slightly than investing in shares that commerce at simply $5 or much less and that may be very dangerous, there are many promising development investments that you would be able to purchase as we speak which can be safer bets over the long run and that will not jeopardize your portfolio within the course of.
1. Village Farms
At a worth of round $9 per share, Village Farms is not removed from being a penny inventory, however its enterprise is much more sound. The corporate is in a terrific place to dominate the Canadian hashish trade now that it owns 100% of Pure Sunfarms, a greenhouse that Emerald Well being beforehand had a stake in as effectively. Pure Sunfarms started rolling out its first edible merchandise earlier this yr with the launch of actual fruit gummies, one thing that it believes is a rarity within the trade. It additionally sells dried flower, rolls, and oil merchandise, making certain that it’s in all the key classes within the trade, which collectively make up 90% of all income.
Over the previous yr, shares of Village Farms have climbed round 70%, outperforming the S&P 500 and its 42% rise in worth throughout that point. And that is with the pot stock falling in latest months. There’s hope for even better returns forward for Village Farms, which with the inclusion of Pure Sunfarms in its entirety throughout the interval ending March 31, grew its gross sales by 63% to $52 million. The quarter additionally marked the third straight interval wherein Pure Sunfarms’ retail branded gross sales grew by not less than 20%.
At a time when many Canadian marijuana corporations are struggling to grow their revenue, Pure Sunfarms is separating itself from the pack, which advantages shareholders of Village Farms. With sturdy income development and the enterprise delivering optimistic adjusted EBITDA numbers, Village Farms is without doubt one of the safer cannabis-related investments you should buy as we speak.
Gaming firm Zynga trades at greater than $10 and its inventory has risen 24% over the previous 12 months. With common cellular video games, together with FarmVille and Zynga Poker, it caters to many various customers. The corporate launched its first-quarter earnings numbers on Might 5, and its income of $680 million for the interval ending March 31 outperformed its earlier steering of $635 million. It was additionally a 68% enchancment from the $404 million that the corporate reported in the identical interval final yr.
However Zynga remains to be engaged on reaching much more development by launching new video games. On the identical day of its earnings launch, it introduced the acquisition of Chartboost, a cellular promoting firm that reaches 700 million customers each month. Zynga initiatives that for 2021, its whole income will climb to $2.7 billion, for a year-over-year development fee of 37%. And that is with out factoring within the Chartboost acquisition.
Whereas some buyers could write off Zynga as a stay-at-home inventory that will not do effectively because the financial system opens again up, that creates a terrific shopping for alternative for Silly buyers who see the potential on this enterprise. Cellular gaming is one thing that may be carried out wherever to assist go time; customers do not should be at residence. Whereas the inventory has underperformed the markets over the previous yr, I would not guess on that development to proceed.
In case your focus is on the financial system and reopenings, then GoPro may be a extra appropriate funding. Its inventory at the moment trades at greater than $11 — the very best on this listing. The corporate is thought for its cameras which can be simple to connect to helmets and that may make recording seamless even when you are within the midst of driving a motorcycle or aren’t capable of bodily maintain a tool.
Like many different companies, GoPro now gives customers a subscription service the place they’ll robotically add movies onto the cloud, use premium enhancing instruments, get reductions, stay stream content material, and even trade two cameras per yr. The corporate has additionally been shifting to a direct-to-consumer mannequin that depends much less on retailers to promote its merchandise.
GoPro launched its latest results on Might 6, and gross sales for the primary three months of the yr soared 71% to $204 million. In April 2021, the corporate reached 1 million subscribers. That is up from 761,000 subscribers it reported as of Dec. 31, 2020, which was already up a formidable 145% yr over yr.
For buyers, a subscription-based enterprise is a protected one. It usually results in extra stability, and may make it a lot simpler for gross sales to develop if an organization has a robust buyer base — which GoPro is proving that it does. Though the corporate is coming off a troublesome 2020 wherein gross sales had been down greater than 32% from the earlier yr, the longer term appears brighter for the digital camera firm with the pandemic almost within the rearview. I feel that GoPro can construct on the spectacular 167% returns it has already generated previously 12 months and be a really thrilling inventory to personal.
This text represents the opinion of the author, who could disagree with the “official” suggestion place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in all our personal — helps us all suppose critically about investing and make selections that assist us grow to be smarter, happier, and richer.