Investment is the best way to create wealth and we all expect maximum returns on our investments. Finding the right investment tool is the key, whether its real estate, stock market, starting a new business or buying an existing business with positive cash flow, these can create massive returns only if the investor pays attention to the new trends and practices patience. Always pay attention to which direction the world is headed, what products and technology making the life of the consumer easier. When I invest in the stock market, I not only look at the business and their finances but also pay attention to its long term viability and demand in future.
Let's talk about what is disruptive technology or innovation: according to Wikipedia, “Disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances.” The term was first coined by American scholar, Clayton M. Christensen, and his collaborators beginning in 1995. Most investors get intimidated by the term disruptive technology because of lack of understanding and patience it requires. Looking back, we all know how Apple, Amazon, Tesla have changed the world and also 10X the return for its investors. It disrupted the traditional way of making calls, using internet, shop and what we drive.
Finding these kinds of technology is not easy, rapid advancement and innovation in areas such as 3D printing, mobile payments, big data, analytics, clean energy, fin tech, health care innovation, the internet of things, cybersecurity, cloud-computing, and robotics and artificial intelligence are difficult to ignore and not take advantage of. In this article , I’ll try to find some of the companies which are already well established and have decent products in the market, most of these technology companies are very fast growing and use their capital to reinvest in the business, for that reason it takes them few yrs to become profitable, just like AMZN, TSLA, NVIDIA, NFLX and some other big tech companies took several years before they started the positive cash flow and became profitable. I still believe that all these big trendy companies mentioned above will continue to make their investors a lot of money in the yrs to come due to their continued innovation and business model.
Below are some of my favorite companies which are changing the world and can be very profitable for its investors. I personally don’t think its the right time to buy, I’ll wait for the pull back we are all have been waiting for, once market drops significantly, start buying in small increment with limit orders. Please read my disclaimer and do your own research before buying any of the stocks I mention in my blog.
TDOC: In the healthcare industry, telemedicine is rapidly gaining popularity, especially during pandemic it has grown tremendously. Hopefully, this pandemic will be over soon but the way Telemedicine has evolved in the past yr, the growth will remain steady and consistent. Teladoc partners with insurance companies so patients see a “virtual” doctor. Using their computers or smartphones, they can actually talk with a medical professional (without waiting two weeks for an appointment), which radically reduces costs.
ISRG: Intuitive surgical are the makers of the Davinci robotic system that helps the surgeon perform surgery with minimally invasive technique under 3D vision. It reduces the amount of pain and recovery time for the patients, which results in early discharge from the hospital and healthcare system can save a lot of money. So far, there is no healthy competition for intuitive surgical and the growth is robust. Financially, the company is strong and has consistent cash flow with very manageable debt.
SQ: Fintech is another rapidly evolving sector with some big names like SQUARE and PAYPAL. Most people agree that the traditional way of payment is going out of style, this pandemic has expedited the process of cashless payment even further. Investing in this sector can give you big returns in coming years. Right now due to social distancing most businesses are acquiring a touchless system of payment which has benefited this sector tremendously in the last 6 months or so, the valuation of SQ has gone up too high. With any pullback in the market these high value stocks can become very attractive to hold in your portfolio.
CGNX: Cognex makes machine-vision technologies that automate tasks to manufacture cell phones, aspirin bottles, automotive wheels in a manufacturing environment. The company’s products monitor production lines, guide assembly robots, detect manufacturing defects and track parts, are used in 3-D applications and ID systems. Robotic vision systems are incredibly advanced, compared to humans, seeing thousands of frames per second compared to the 30 that we humans can visualize and process. Today, Cognex says 80% of its revenues come from factory automation, which is growing 20% annually.
Z: Zillow is disrupting the way we search and buy homes. Especially in this low interest rate times, Zillow has seen a surge in traffic and customers seeking homes on its platform. Zillow is not just helping the search, it also helps the entire process of buying and selling of homes in a certain price range.
NVTA: Invitae Corp is new into genomic technology. High quality, affordable genetic testing with transparent sharing of clinical variant data is the new gold standard for 21st century genomic medicine. Genomic sciences is changing the way scientists discover, test and treat certain diseases. Other big names in this sector are Illumina (ILMN) and Crispr Therapeutics (CRSP).
TCEHY: Tencent Holdings Limited, an investment holding company, provides value-added services (VAS) and Internet advertising services in Mainland China, the United States, Europe, and internationally. The company operates through VAS, FinTech and Business Services, Online Advertising, and others segments. It offers online games and social network services; FinTech and cloud services; and online advertising services, such as media, social, and others advertisement services.
Reference: I used research material from Investopedia, Yahoo Finance and Nancy Zambell.
By Adnan Rafique M.D.
OCT 2020.
Commentaires