2 Progress Shares To Purchase Earlier than Dogecoin – The Motley Idiot

Stock market returns have become stable and strong this year, with the benchmark S&P 500 Index increased by around 21%. That’s much better than the roughly 14% the index has averaged over the past 10 years, and there are still a few months of trading activity left.

But whichever way you look at it, those returns pale in comparison to the profits of cryptocurrencies in 2021. One of the top performers this year Dogecoin, a token that has become popular in a segment of retail investors – it’s up more than 6,000% this year.

Yet the newer Dogecoin buyers are not replicating these blockbuster returns. In Thursday morning prices, Dogecoin is down nearly 60% from its all-time highs this spring. One of the reasons for the sharp drop is the lack of utility from Dogecoin. It’s not an efficient way to make transactions, unlike the more common tokens Bitcoin and ether. Dogecoin founder admittedly created it as a joke, and it became famous through viral social media advertising rather than any specific use case.

Investors considering buying Dogecoin should consider high-growth stocks instead. Owning a portfolio of real companies with real revenue streams can be far more rewarding in the long run. Here are two strong tips to get you started.

A person pointing to two arrows that surpass another arrow, with a cityscape underneath

Image source: Getty Images

Upstart stocks

There is another segment of the financial sector prepared for disruption as technology helps transform the lending process. Upstart stocks (NASDAQ: UPST) applies artificial intelligence to screen borrowers using non-traditional metrics and automate the approval process.

The company uses its technology to make loans to banks, which in turn pay Upstart a fee so it is not exposed to credit risk. It recently expanded into auto loan issuance, the largest credit market it has ever operated in, and its growth has exploded.

Metric

2nd quarter 2020

Q2 2021

growth

revenue

$ 17.4 million

$ 193.9 million

1,018%

Lending

$ 164 million

$ 2.795 billion

1,604%

Data source: company registrations

Upstart has also raised its full-year 2021 revenue forecast twice so far. It now forecasts sales of $ 750 million. When it delivers, that’s 221% year-over-year growth.

But it gets even better for investors. In April, Upstart acquired Prodigy, a dealership software company that helped sell $ 1 billion in vehicles in the second quarter alone. Upstart and Prodigy are now working on an integration that will allow Upstart to fund some of these sales that could increase its automotive ambitions.

Upstart is already profitable, which is a rare trait in high-growth tech companies. Analysts predict it will hit $ 1.33 per share in 2021, so 178 times that number the stock doesn’t look cheap. However, it’s the growth rate that investors are paying for, and in three to five years, today’s price could look like a bargain in retrospect.

A smiling business owner hangs an open sign on his blue shop door

Image source: Getty Images

Bill.com

A second high growth stock to consider in lieu of Dogecoin is Bill.com (NYSE: BILL), which operates a cloud-based payment management platform for small and medium-sized businesses. The company created a digital inbox that allows its customers to manage the flow of invoices, so companies can pay bills quickly and from one place.

Bill.com expects the US economy to continue to heat up, which will be beneficial for small businesses. And in its earnings release for the fourth quarter of the fiscal year (which ended June 30), it offered explosive projections for fiscal 2022.

Metric

Fiscal year 2020

Fiscal year 2021

Fiscal year 2022 (guidelines)

2 years expected CAGR

revenue

$ 158 million

$ 238 million

$ 478 million

74%

Data source: company registrations. CAGR = Average Annual Growth Rate. The 2-year CAGR is based on Bill.com’s 2022 forecast.

Bill.com generates the majority of its revenue from software subscriptions and transaction fees. The latter grew twice as fast as core revenue – 204% to 100% – for the quarter ended June 30, due to $ 42 billion in payments processed.

On June 1, the company completed the $ 2.5 billion acquisition of Divvy, a business expense management platform that also offers credit products. The deal offers Bill.com a more holistic set of business solutions.

While Bill.com is not yet profitable, it should be closer to breakeven in fiscal 2022. With a gross margin in excess of 74%, it can afford to invest in growth at the expense of short-term gains. It is clear that sales growth has not yet peaked, but if it does, the company will be able to cut its spending in order to generate profits for investors.

The stock trades at more than 110 times its sales in fiscal 2021, which is extremely high. However, this multiple is halved when measured against the forecasts for fiscal year 2022. Similar to Upstart, this is a high growth opportunity at a price that might look cheap in hindsight to patient investors buying now.

But most importantly, Bill.com offers businesses useful payment solutions that Dogecoin doesn’t.

This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.


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