For more than 18 months, Wall Street and investors have enjoyed a historic bounce back rally from the pandemic-induced bear market. After losing a third of its value in roughly a month during the initial wave of COVID-19, the benchmark S&P 500 has since doubled.
Some folks might be leery of putting money to work in the market with valuations soaring since March 2020. However, history has repeatedly shown that transformative businesses tend to grow in value over time. Ultimately, when you buy a stock matters far less than how long you plan to hold onto your winners.
Even with the S&P 500 within striking distance of an all-time high, the following five unstoppable stocks all have millionaire-making potential. If you have $250,000 to invest right now, these companies can make you a millionaire by 2030, or possibly even sooner.
Cybersecurity is arguably the safest sustainable double-digit growth trend throughout the decade. With more enterprise and consumer data than ever being moved into the cloud, the onus of protecting this information is increasingly falling on third-party cybersecurity stocks, like CrowdStrike Holdings (NASDAQ:CRWD).
CrowdStrike is what I consider to be the premier name in cloud-data protection. The company’s security platform, Falcon, was built in the cloud and relies on artificial intelligence to grow smarter at recognizing and responding to threats over time. In an average week, Falcon is overseeing approximately 6 trillion events. This ability to adapt over time makes Falcon a smart and cost-effective solution, relative to on-premises security options.
There’s also been no signs of slowing in CrowdStrike’s key performance indicators. Subscribing customers have catapulted from 450 to north of 13,000 in under five years, with the percentage of customers purchasing four or more cloud modules growing from sub-10% to 66% over the same stretch. Having its subscribers scale their usage of high-margin subscription services is precisely why CrowdStrike’s gross margin has already hit its long-term target so early in its growth process.
If I told you that a small-cap furniture stock qualifies as both unstoppable and a bona fide millionaire-maker, would you believe me? Let’s take a closer look at how $250,000 invested in Lovesac (NASDAQ:LOVE) could make you a millionaire by or before 2030.
The big thing to understand about Lovesac is that it’s not a traditional furniture company. For starters, its product line is focused on functionality. While it may have once been known for its beanbag chairs (known as sacs), approximately 85% of its revenue now derives from selling sactionals — modular couches that can be rearranged dozens of ways to fit any livable space. There are around 200 different cover choices for sactionals, meaning they’ll match the theme or color of any customers’ home. Perhaps best of all, the yarn used to make these covers is made entirely from recycled plastic bottles. With choice and ESG leanings like this, it’s no wonder why millennials have become Lovesac’s core customer.
Something else that sets Lovesac apart from traditional furniture retailers is its omnichannel presence. Most furniture companies are reliant on their brick-and-mortar presence. Meanwhile, Lovesac was able to pivot nearly half of its sales online during the height of the pandemic. With pop-up showrooms and showroom partnerships also on the table, Lovesac’s marketing reach is greater than its peers, yet with far less overhead. This has allowed Lovesac to become profitable well ahead of schedule, and it should help the company maintain a double-digit growth rate.
Cannabis is another unstoppable trend that should show investors the green throughout the decade. With the U.S. acting as the epicenter of worldwide weed growth, marijuana stock Cresco Labs (OTC:CRLBF) has all the tools needed to make you a millionaire.
Like most U.S. multistate operators (MSO), Cresco Labs has a burgeoning retail presence. It currently has 37 operating dispensaries, but should soon have 40, once its acquisition of three Cure Penn retail locations closes.
What’s notable about Cresco’s retail expansion, aside from its willingness to lean on acquisitions as a means to grow, is that it’s focusing its efforts on a number of limited-license markets. States like Illinois, Ohio, and Pennsylvania purposefully limit how many dispensaries can open, as well as how many retail licenses a single company can hold. In other words, regulators are reining in competition, which should give Cresco plenty of opportunity to build up its brands and garner a loyal following.
Cresco Labs’ industry-leading wholesale operations also separates it from other MSOs. Because of its Origin House acquisition in January 2020, Cresco holds a lucrative cannabis distribution license in California, the market with the highest annual pot sales in the world. This license allows the company to place its proprietary brands into more 575 dispensaries throughout the Golden State, and should lead to smoking-hot growth for years to come.
Another unstoppable stock that could turn $250,000 into $1 million by 2030, or potentially sooner, is companion animal-focused health insurance company Trupanion (NASDAQ:TRUP).
Growth for the pet industry might as well be written in stone. According to data from the American Pet Products Association (APPA), it’s been at least a quarter of a century since U.S. year-over-year spending on our furry companions declined. Further, the number of U.S. households that owns a pet rose from 56% in 1988 to 70%, as of the 2021-2022 survey from the APPA. An estimated $109.6 billion will be spent on pets in the U.S. this year, and Trupanion intends to get its slice of the pie.
Over the past two decades, Trupanion’s coverage has grown to more than 1 million pets. This is predominantly a subscription-based model, meaning the company is generating high-margin, predictable cash flow. The crazy thing is the company has only penetrated about 1% of the North American market. If it were to reach a similar penetration rate to the U.K. of 25%, its addressable market would be closer to $33 billion.
Among major pet insurers, Trupanion is also the only one to provide software to veterinary clinics that can handle payment at the time of service. This means more convenience for the company’s subscribers, as well as added reason for clinics to promote Trupanion as the premier pet insurance option.
Last but not least, fintech stock Square (NYSE:SQ) is an unstoppable company that can turn a $250,000 investment into $1 million by 2030, or well before.
Square’s foundational operating segment has long been its seller ecosystem. This segment provides point-of-sale devices, loans, analytics, and other tools to help merchants succeed. The gross payment volume (GPV) traversing Square’s network grew by an annualized 49% in the seven years leading up to the pandemic, with well over $140 billion in GPV expected this year.
Interestingly, the seller ecosystem is proving to be not just for small merchants any longer. During the second quarter, 65% of GPV derived from businesses with $125,000 or more in annualized GPV, up 10 percentage points from two years prior. Since merchant fees drive this operating segment, bigger businesses should yield juicier gross profits.
But let’s beat around the bush: All eyes are on peer-to-peer digital payments platform Cash App. Cash App’s monthly active user count more than quintupled in three years, ending in 2020, and it’s generating $55 in gross profit per user, compared to just $5 in costs to attract each new user.
To boot, Square recently announced that it would acquire buy now, pay later giant Afterpay. This deal allows Square to create a closed payment loop that’ll connect Cash App to the seller ecosystem and fuel exceptional growth throughout the decade.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. 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.