The self-made billionaires didn’t become rich overnight? And those who did were not able to sustain their riches. All good things need time and patience. This rule applies even in the stock market.
All good things for those who wait
Take the case of Amazon, which has made its owner the richest man in the world. Today, the stock trades at US$3,630. But 20 years from now, the stock was just US$10 a share. In fact, the stock took the hit of two big crises: the 2000 dot.com bubble and the 2008 financial crisis. These two crises made it stronger.
It was only in 2009 its real growth began. Then there was no looking back. Only those who invested in this future technology and waited with patience even during the crisis converted their US$1,000 into US$71,000.
Two future growth stocks
I am no wizard that can tell the future. But looking at the current trends, I bring two stocks that have the potential to become future growth stocks. If you look at their stock price and fundamentals, they may be weak. But it is what is in the making that holds the potential.
You may know BlackBerry (TSX:BB)(NYSE:BB) from the attention it garnered because of the short squeeze or for its button phones back in 2005. But the company’s turnaround to a software company is taking shape. Its endpoint security solutions are used by governments, financial houses, and large enterprises. But it still has a lot of catching up to do with competitors.
You may not see it, but the BlackBerry QNX platform powers your car. Now, BlackBerry is expanding in the automotive space. It plans to launch the vehicle data analytics platform ‘IVY’ in February 2022. Autonomous cars will become a reality by 2030, and they need a large ecosystem to make it happen. BlackBerry is jumping into the right trend early. It has already received a good response from customers.
But I won’t give you high hopes. BlackBerry still earns 61.5% of its revenue from the cybersecurity business. The next three to five years are challenging, and the real growth will come when electric and autonomous vehicles become common. Until then, you can buy this future growth stock when its price dips below $13 and let it ferment in your portfolio.
You can look at Hive Blockchain Technologies (TSXV:HIVE) stock in two ways.
- The stock that lost more than 55% of its value from its February high, or
- The stock surged 1,555% in 10 years. Hive is a blockchain technology company.
Blockchain technology’s main use is in mining cryptocurrency, and Hive earns almost all its revenue from crypto mining.
But the blockchain technology has immense growth potential. It is like the power stone whose potential humans are yet to unleash. Think of it like artificial intelligence (AI) six to seven years from now.
Hive is investing in identifying other applications and uses of blockchain and its high-performance data farms. But this investment will take time to materialize. Until then, you may see bouts of growth cycles as the crypto bubble forms.
Hive has an inventory of Bitcoin and Ethereum. Hence, Hive stock will surge 700-800% when crypto surges and correct 60-70% when the bubble bursts.
All in all, give the above two stocks at least five years to start seeing some meaningful returns.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool owns shares of and recommends Amazon. Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends BlackBerry and recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon.