 by Louis Smith, Editor-in-Chief
Many stocks dropped dramatically as the Coronavirus Pandemic caused cities, states, and countries to shutdown non-essential economic activity. One in particular is ridesharing: as people are encouraged (and some are even ordered) to say home. Even colleges and universities are transitioning to online learning. This means that those frequently made trips are no longer required resulting in loss of business for ridesharing companies like Uber and Lyft. What does that mean and how does it effect investors? As of today, Uber and Lyft has seen their shares free-fall to 45% and 30%, respectively. Even Tesla themselves has seen their shares fall over 40% from its recent peak. With that said, this means that this very moment is an opportune time to purchase shares while they’re low due to the coronavirus outbreak.  Uber The Stock for Delivering Growth In an astonishing three years, the company has grown gross bookings at 50% compounded annual rate (CAGR). In other words, the company grew quickly without making much profit. However, its future in the market was looking very bright before the outbreak. The company now has 111 million active riders worldwide and a reduction of incentives to customers, which means that profitability will be within reach once the economy returns back to normal. Lyft The Stock for Focused Strategy On the other hand, Lyft has a more focused strategy. Unlike Uber, that also dipped into the food-delivery industry with Uber Eats; Lyft is strictly sticking with the ridesharing business. In doing so, the company is growing strong and even accomplished a significant milestone in its most recent quarter. It eclipsed $1 billion in quarterly revenue, which was up 53% year over year. This growth is a result of increased revenue per rider and more riders overall (which is also up 23%). For investors, owning both companies will be a wise decision.  Tesla The Stock for Growth Investing The company has grown at a CAGR of 57% with limited to no marketing spend. This was made possible due to rising capacity and production — the ramping up of Model 3 production — a fully electric four-door sedan that has been generating strong organic demand. In Fiscal 2019, Tesla delivered more than 287,000 Model 3s. In fact, the company added capacity to build an additional 150,000 Model 3 cars per year at its Shanghai facility. In doing so, this will further assist in the incredible growth, reduce transportation expenses, and provide some diversification in production. This all very important, especially the final point, as we are enduring the coronavirus pandemic. Investors Why Spend $1000 on These Stocks? All three businesses are experiencing disruption due to the coronavirus outbreak; but expected to see growth once the economy returns to normal. It’s advised to invest now rather than when they start collecting shares; this means that prices will be much higher than current levels. Uber, Lyft, and Tesla are fantastic growth stocks that do include a high degrees of risk. This means that the $1000 you will spend across the three stocks should be money that you won’t need for least the next few years.
Comments
|
