3 Emerging Industries, 3 Best Companies to Invest In Right Now
Investors wanting the best stocks to invest in right now often dream of finding the investment that was equivalent to buying Microsoft Corporation (NASDAQ: MSFT ) in 1986 or Apple Inc. (NASDAQ: AAPL ) in 1997 after Steve Jobs returned and began its turnaround. Such investments are difficult to find at those stages. When they become discovered, they do so as they are building an industry of the future.
The PC served as little more than a toy before Microsoft revolutionized the software industry. The digital music and software industries had not yet been created when Steve Jobs came back to Apple. Both companies grew large as the industries they served evolved from concept to acceptance by the public.
Investors who want to find the next Microsoft or Apple to profit from the best stocks to invest in now have to discover two things. First, they have to identify emerging industry.
Secondly, they must perform the more difficult task of finding the stocks in that industry to take them there. While none of us can promise a stock will behave in such a manner, these three industries and stocks could make these equities the best stocks to invest in right now.
Telehealth - Teladoc Inc (TDOC)MayApps207 via WikiMedia
One concept that has gained traction over the last few years is virtual doctor visits. Instead of taking time off of work to visit a doctor, patients have 24-hour access to doctors online. One such company is Teladoc Inc (NYSE: TDOC ). Its 75% market share could make it one of the best stocks to invest in right now. Analysts estimate about one-third of the 1.25 billion office visits and 80% of the 168 million behavioral-health related per year that occur in the U.S. could be handled in such a manner. And that is just the U.S. potential.
The average cost of an office visit stands in the $150-$200 range. Teladoc charges only $40 for a virtual office visit, with more charged for visits related to behavioral health. Moreover, with its 24-hour availability, workers will less often need to take time off from work.
Analysts believe TDOC will not achieve profitability for another two years. However, in its latest quarterly report, TDOC beat estimates, and the company's quarterly revenues more than doubled. The company has enjoyed this level of revenue growth for most of the decade. Also, TDOC saw 554,000 visits from paid members in the U.S. during the quarter, up from 385,000 in the same quarter last year. With the market less than 1% tapped, the potential for growth remains exponential.
Marijuana - CannTrust Holdings Inc (CNTTF)
Although cannabis has existed for millennia, recent moves toward legalization make this a new industry. Now, with full legalization coming to many developed countries and increasing acceptance in the United States for medicinal purposes, investors have just begun tapping its potential for growth.
Vaughan, Ontario-based CannTrust Holdings Inc (OTCMKTS: CNTTF ) produces medical-grade cannabis free of pesticides. They also focus heavily on medical research and partner with a pharma company to innovate and develop products. Revenues quadrupled in 2017 to $21 million. Analysts expect about the same level of revenue growth for 2018. They estimated revenues of about $88 million for the year.
Choosing CNTTF was less clear of a decision as several viable cannabis now operate. Canopy Growth Corp (OTCMKTS: TWMJF ) has emerged as the largest. With its marketing deal with Snoop Dogg, and its investment from Constellation Brands, Inc Class A (NYSE: STZ ), Canopy has attracted most of the attention.
I believe Canopy and peers such as Aphria Inc (OTCMKTS: APHQF ) and MedReleaf Corp (OTCMKTS: MEDFF ) will likely also perform well. However, CannTrust's small size and focus on higher-margin products such as cannabis oils could make it one of the best stocks to invest in right now.
Natural Gas Exports - Chesapeake Energy Corporation (CHK)Philadelphia 76ers Via Flickr
Chesapeake Energy Corporation (NYSE: CHK ) has experienced the ups and downs of the energy market since its founding. Although natural gas is hardly a new industry, the inability to export natural gas limited the potential of this energy source.
However, thanks to export terminals owned by firms such as Cheniere Energy, Inc. (NYSEARCA: LNG ), lucrative markets in Europe, East Asia and other places are now available to the American natural gas industry. Thanks to this technology, American natural gas can fuel the emergence of Asia as an economic power.
It can also give Europeans who cannot afford to depend on Russia for natural gas a viable alternative. As the third-largest natural gas producer in the U.S., CHK will derive much of the benefits.
High debt levels drove CHK stock to the brink of bankruptcy following the energy price crash that occurred in the middle part of the decade. Years later, due to the high debt levels that remain, the stock trades at just over $3 per share. Also, because it has become a $2.8 billion company with $9.3 billion of debt remaining, this remains a speculative stock. This makes its forward price-to-earnings (PE) ratio of 4.7 dangerously appealing.
Nonetheless, analysts project profitable quarters well into the future. Also, assuming exports increase the price and the demand of American natural gas, those who buy CHK stock could look back and see that this was one of the best stocks to invest in right now.
Earning outsized profits often means outsized risk. If one has less risk appetite, the larger-cap Cheniere could also be one of the stocks to invest in now. However, for those who can tolerate the risk, investors could see the U.S. emerge as the most important country in the energy industry and enjoy outsized profits along with that growth.
As of this writing, Will Healy is long TDOC and CNTTF.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.