Having extra money that you’re ready to put to work, after paying off high-interest debt and building up an emergency fund, is a fantastic position to be in. The stock market is the best tool for creating long-term wealth, returning roughly 10% per year over time. With some patience and a time horizon of many years (and even decades), you can be a successful investor as well.
Here are three stocks to invest $3,000 in right now, with $1,000 in each.
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1. Block
Formerly known as Square, Block (NYSE:SQ) is a booming company in the fintech space known for its Seller and Cash App ecosystems. The former includes millions of smaller merchants that use Block’s suite of hardware, software, and financial services offerings to operate smoothly on a day-to-day basis. The latter is a popular personal finance tool with a user-friendly approach that can substitute for basic traditional banking products.
In the most recent quarter, the Seller segment increased gross profit 48% year over year to $606 million. Of the $41.7 billion of gross payment volume (GPV) Block processed in the third quarter, 37% came from mid-market sellers (those that had greater than $500,000 in annualized GPV), a figure that has trended up. And Cash App, with 40 million monthly active users, is seeing higher engagement and is continuously introducing new features like Cash App Pay and Cash App for individuals between the ages of 13 and 17.
The company’s name change implicitly points to a new strategic direction, in which Bitcoin and its underlying technology, the blockchain, dominate CEO Jack Dorsey’s time and attention. The billionaire thinks Bitcoin will be the native currency of the internet. And Block’s initiatives like TBD and Spiral are aiming to develop crucial infrastructure to bring the world’s most valuable cryptocurrency to the mainstream.
The stock is down more than 40% over the past five months, providing opportunistic investors with a great chance to load up on shares in this innovative enterprise.
2. Etsy
As an online marketplace, Etsy (NASDAQ:ETSY) is a popular shopping destination for people interested in handcrafted goods. The e-commerce site now has 7.5 million active sellers and 96 million active buyers who deal in items ranging from home furnishings and jewelry to apparel and beauty supplies.
During the third quarter of 2021, Etsy generated $532.4 million in revenue on $3.1 billion in gross merchandise sales (GMS). Both figures were up 17.9% versus the prior-year period, which is remarkable given the triple-digit growth registered in the third quarter of 2020 when people were stuck at home. The number of habitual buyers, or those with six or more purchase days and at least $200 in spending in the past 12 months, jumped 65%, the highest of any buyer group.
Etsy has a massive $1.7 trillion global opportunity. Acquisitions over the past few years, including musical instrument marketplace Reverb; secondhand fashion reseller Depop; and Elo7, known as the Etsy of Brazil, support the company’s international ambitions. In fact, 42% of GMS in the third quarter was from outside the U.S., up from 35% in the year-ago period.
Since the end of November, Etsy’s share price has fallen nearly 30%, giving the business a market cap of $27 billion. Smart investors should consider buying the stock.
3. Roku
Roku (NASDAQ:ROKU) is riding the long-term secular shift away from cable TV and toward streaming entertainment. The company provides a platform that connects viewers, streaming services like Netflix and Walt Disney‘s Disney+, and businesses looking to advertise in the burgeoning connected-TV environment.
The fourth quarter of 2021 is expected to be the second straight period of decelerating sales growth, sparking investor worries as we return to some level of normalcy as people spend less time at home. Still, in the most recent quarter, Roku’s active membership count and hours streamed increased 23% (to 56.4 million) and 21% (to 18 billion), respectively, year over year. And thanks to the monster success of The Roku Channel, average revenue per user soared 49% compared to the third quarter of 2020.
Management believes that its success in the U.S. can be replicated in other countries as streaming penetration continues rising. To make progress toward this goal, the company recently introduced its streaming players in Germany. And after announcing new TV models in Brazil in the third quarter, Roku will expand further in Latin America with Roku TVs in Chile and Peru.
In the same vein as Block and Etsy, Roku’s stock is at a meaningful discount right now, having shed half of its value over the past five months. This makes the streaming company a great place to invest right now.
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.
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