The Downside of Not Planning a Budget as a Digital Nomad
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Forever is a very long time. There’s a good case to be made that you shouldn’t hold your stocks forever. You may want to sell some in retirement, for example, to supplement your Social Security income. Selling is the right thing to do when a stock has lost your confidence, too.
Still, there are some terrific companies with corresponding stocks that have been great performers in the past and that seem poised to keep rewarding shareholders well for a long time. Such companies might stay in your portfolio for many decades — and possibly even for the rest of your life. After all, if you don’t need to liquidate your whole portfolio before you die, you can leave some valuable shares for your loved ones.
Image source: Getty Images.
Here then are four solid candidates for your long-term portfolio.
1. Veeva Systems
Veeva Systems (NYSE: VEEV) is only about 15 years old, but it has grown into a software-as-a-service (SaaS) company with a recent market value near $36 billion. It describes itself as “a leading global provider of cloud-based software solutions for regulated industries such as consumer goods, chemical, cosmetics, and life sciences.” It helps companies make sense of the data they collect, offers customer relationship management services, and helps drug companies manage their many clinical trial processes — among other things.
So how much of a growth stock is Veeva? Well, over the past decade, its stock has grown by 505%, as of the end of January. Annualized, that’s 24%, versus just 14% for the S&P 500. (That 14% is very respectable, too.) Its last quarter featured results that underwhelmed some investors, but those results included revenue rising 26% year over year, while earnings advanced 9% on a generally accepted accounting principles (GAAP) basis and 26% on a non-GAAP basis. (Investors would do well to learn more about GAAP to help them better understand financial statements.)
2. MercadoLibre
MercadoLibre (NASDAQ: MELI) is often described as “the eBay of Latin America,” but there’s a lot more to know about it than that. For example, it also encompasses a digital payment system, Mercado Pago — somewhat similar to PayPal, which eBay spun off in 2015. Meanwhile, consider that Latin America is home to more than 635 million people — roughly double the size of the U.S. — which means there’s a lot of growth potential.
And MercadoLibre is growing briskly, with third-quarter revenue up 73% year over year (on a currency-neutral basis) and gross merchandise popping 30%. The company’s stock has surged some 1,100% over the past decade, averaging more than 28% annually. Better still, the shares seem somewhat undervalued, too, with their forward-looking price-to-earnings ratio recently at 120. While steep, it’s well below the five-year average of 528.
Image source: Getty Images.
3. Unity Software
Unity Software (NYSE: U) may be unfamiliar to most of us. But with a recent market value topping $30 billion, it’s become, in its own words, “the world’s leading platform for creating and operating interactive, real-time 3D (RT3D) content.” Consider these statistics:
71% of the top 1,000 mobile games use Unity’s software.
50%-plus of mobile, PC, and console games use the company’s tools and services.
Each month, some 2.5 billion users use content featuring Unity technology.
The company’s stock has been trading only since late 2020, and its shares were recently up more than 50% since that time, averaging about 37% annually. In its third quarter, revenue popped 43% year over year, with net losses narrowing. Unity bulls like its recent acquisition of special effects company Weta Digital, and some wonder whether Unity’s operating system will be the one to dominate the metaverse.
4. Universal Display
The ticker symbol of Universal Display (NASDAQ: OLED) may give you a hint about its business focus: displays for electronic devices such as smartphones, TVs, tablets, and smart watches. Its specialty is energy-efficient organic light-emitting diode (OLED) technology, and its displays are found in Samsung’s Galaxy series and LG‘s OLED televisions, among other product lines.
Over the past decade, Universal Display’s stock has popped more than 230%, averaging about 13% annually. That actually lag’s the S&P 500’s return in the same time period, but remember — when thinking about investing in various stocks, future performance counts more than past performance. In the company’s third quarter, revenue grew by 23% year over year, with CFO Sidney Rosenblatt noting, “As we look to the OLED industry, we believe that we are still in the early innings of a long-term secular growth market. As the next wave of OLED adoption for medium-and-large-area applications takes shape, we are fortifying our position as an OLED leader and innovator on multiple fronts.”
Universal Display’s future looks promising, as TV makers upgrade their offerings, such as into 4K models, and more people buy models with very large screens, requiring more square feet of display. So far, OLED screens are only present in a small portion of TVs — as they’re costlier — but it’s likely that that portion will grow over time, presenting a tailwind for the company.
These four companies have very promising futures, so dig deeper into any that interest you — and know that there are plenty of other growth stocks that look attractive, too. It’s good to aim to hang on to your shares for many years or even decades, but never do so blindly. Be sure to keep up with your holdings, ideally at least quarterly, to make sure they’re still on track and deserving of your confidence.
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Selena Maranjian owns MercadoLibre, PayPal Holdings, Unity Software Inc., Universal Display, and Veeva Systems. The Motley Fool owns and recommends MercadoLibre, PayPal Holdings, Unity Software Inc., and Veeva Systems. The Motley Fool recommends Universal Display and eBay and recommends the following options: short January 2022 $82.50 calls on eBay. The Motley Fool has a disclosure policy.
