It will take some serious effort to multiply $10,000 into $50,000 by 2025. Can a stock be counted on to increase in value that much? Not. Some people, though, will. Stocks that don’t double in value within two years have a good chance of doing so during the following decade. That’s also really decent, by the way.
Compared to the general stock market’s average yearly gain over several decades, which is close to 10%, a stock would need to rise at a pace of around 124% per year to quintuple in just two years. Even at a growth rate of 17.5% per year, quintupling in a decade is far faster than the market average.
To be clear, I’m not claiming that investing $10,000 in these three companies would guarantee a profit of $50,000. They may increase by a factor of five in only two years, and the odds of that happening increase with more time. Their stock prices are more likely to increase rapidly but slowly, which may still be very rewarding for investors.
If Paycom Software (NYSE: PAYC) were to be five times as valuable, its current market cap of around $19.5 billion would be approximately $100 billion. Is it a fair assessment? That’s plausible if it beats current forecasts, which predict annual growth of around 22% over the next five years. With a projected price-to-earnings (P/E) ratio of around 42 and a price-to-sales ratio of 12 (much lower than the firm’s five-year average of 20), the stock appears to be undervalued.
Paycom, like Automatic Data Processing and others, makes money by selling payroll and human resources management software to businesses. However, its “Beti” technology enables workers to handle their payroll, detecting and resolving mistakes sooner and saving businesses significant sums of money.
Revenue for the first quarter was up 28% year over year, while net income according to GAAP was up 30%. The firm is expanding rapidly. Sales over the prior twelve months are up 75% from 2020, and EPS has more than quadrupled. The firm is overgrowing and has plenty of space to develop domestically and abroad. When asked about the company’s first-quarter results, CEO Chad Richison said, “Results for the first quarter of 2023 were excellent, with robust revenue growth from new clients and expanding margins, as demand for automation and our easy-to-use HCM solutions continues to increase…”
Aptiv (NYSE: APTV) is a company worth learning about if you share my enthusiasm for the promising future of electric automobiles. Aptiv is a technology business that will usher in the next phase of active safety, autonomous automobiles, intelligent cities, and connectivity,” as stated by CEO Kevin Clark. We’re a seasoned team with a start-up mentality, ready to tackle any problem for any client. Delphi Automotive is a name that may be familiar to you.
Aptiv’s first quarter saw record GAAP sales of $4.8 billion, up 15% year over year, near-record bookings, and GAAP net income double the year-ago level, all pointing to the company’s rapid expansion. And this is even though there is now a chip scarcity and inflation-related difficulties. Twenty of the world’s largest automobile manufacturers are among Aptiv’s satisfied clients. These include GM, Ford, Tesla, and Stellantis (the parent company of the Jeep and Dodge brands).
Recently, Aptiv’s market worth was $27 billion; if it were to quintile, it would be roughly $135 billion. Its projected price-to-earnings ratio of 23 is lower than its five-year average of 27, and its price-to-sales ratio of 1.5 is lower than its 1.9.
Online real estate powerhouse Redfin (NASDAQ: RDFN) operates “the country’s No. 1 real estate brokerage site.” Redfin’s market value is now at $1.2 billion, and if it were to quintuple, it would be around $6 billion (still much less than Zillow’s current market value of roughly $11 billion).
You may remember Redfin as a website with many house listings, but did you know it also offers brokerage services? It’s true and possibly disrupting industry norms by charging listing costs as low as 1% — “less than half of what brokerages commonly charge.” It claims to have saved its clients in over a hundred markets in the United States and Canada over $1.5 billion in commissions.
Even though Redfin’s stock has dropped about 90% from its peak in early 2021, the company still has much going for it. One reason is that the stock’s price-to-sales ratio of 0.6 is significantly lower than the five-year average of 3.2. As a result of inflation and increased interest rates, the real estate market is also now slow. However, such challenges are expected to be short-lived, and the market recovery should boost Redfin’s fortunes.
First-quarter statistics showed a significant decrease in sales owing to the difficult circumstances and a less-than-expected net loss of $61 million, which was smaller than the loss of $90 million a year before. According to management projections, the firm is expected to be profitable by the end of 2023.
There are plenty of other attractive equities outside the three I listed. You might find even more potential additions to your portfolio with some investigation. And keep in mind that if you want to see rapid growth in your wealth, you should seek to make sizable contributions to your investment accounts regularly, and you should hold on to promising assets for at least a few years.