You don't need to have thousands of dollars to begin investing. If you have only $20, you can still buy shares of high-quality stocks. Your future self might thank you for investing that $20 instead of buying pizza tonight -- because investing $100 or even $20 can help you build wealth over the long term.
In today's investing world, investors can buy fractional shares of some of the largest businesses in the world, but if you're looking to buy whole shares of high-quality stocks, these three companies could be smart stocks to consider.
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1. fuboTV
fuboTV (NYSE:FUBO) is one company that helps people switch to a fully streaming experience. With streaming services gaining popularity and creating exclusive content, cable channels might be providing inferior programming by comparison. However, services like Netflix (NASDAQ:NFLX) still don't stream live news or sports -- shows that are incredibly valuable to many users worldwide. This is why many consumers still use cable, but fuboTV is trying to change that by offering a streaming service specifically designed for live sports and news.
This unique service has attracted 945,000 subscribers, each of those users watching over 121 hours of TV each month. This has resulted in astounding growth for the company. In the third quarter, its total revenue grew 156% and will likely continue to grow. fuboTV is unique in the streaming service industry because few of its competitors focus on live streaming. The only other similar service is Alphabet's (NASDAQ:GOOG)(NASDAQ:GOOGL) YouTube TV, with 4 million subscribers. Both fuboTV and YouTube TV could see great success over the next decade.
fuboTV is losing plenty of cash, but its losses are improving. The company lost $106 million in the third quarter of 2021, but this decreased from $274 million in the year-ago quarter. If this trend continues, fuboTV could become profitable soon.
At a valuation of just 3.3 times sales, its losses and the minor competition it faces are certainly priced into the stock. Therefore, if the company can continue growing its subscriber count rapidly -- meaning it is gaining market share -- while improving its net losses, shares could bounce back. fuboTV is providing a critical yet underrated service in a large industry. I think that market position will allow it to fly under the radar and rapidly become a household name over the next five years, and investors could benefit from that.
2. SEMrush
SEMrush (NYSE:SEMR) provides an all-in-one platform for marketing teams to monitor the performance and effectiveness of their marketing strategies. Marketing teams typically have a fixed ad budget but dozens of potential strategies. SEMrush allows teams to research and monitor which marketing strategy could most efficiently reach their target audience.
With over 79,000 customers -- Tesla (NASDAQ:TSLA) and Amazon (NASDAQ:AMZN) being two of them -- SEMrush has become a leader in the space. Some small players may offer tools for one or two marketing strategies, but SEMrush has over 50 tools and is an industry leader in 19 of those strategies. Customers don't want to toggle between multiple services to aggregate data and determine what marketing strategy is best, and SEMrush allows them to avoid this by having one inclusive platform.
The company became public in March 2021, and it is near profitability and growing its top-line 53% year over year -- a rare combination for newly public companies. The company had $577,000 in net income in the first nine months of 2021, and its revenue was $134 million for that period, growing 52% year over year. With an addressable market opportunity of $20 billion going forward, SEMrush does not lack potential. As the market leader, I think the company could capitalize on this large industry over the next five years.
3. Olo
If you have ordered food from Shake Shack, Sweetgreen (NYSE:SG), or one of 500 other restaurant brands online recently, you have likely interacted with Olo (NYSE:OLO) without even knowing it. Olo provides software for restaurants to simplify the online ordering process. The platform allows businesses to aggregate orders from third parties, mobile apps, and dozens of other sources so that restaurants don't miss a beat and can provide seamless online ordering and delivery services.
The company has a unique sales strategy of making deals with corporate offices, which then push the software down to individual stores. This is why the company has just 500 brands as customers but over 76,000 active locations where it is used. As a result, the company is seeing strong growth. Q3 revenue reached $37 million, growing 38% year over year.
The company trades at an all-time low valuation of 16 times sales, making it a potential buying opportunity for investors. This valuation could be a bargain, especially considering how big the industry could grow. If you're anything like me, you are ordering food online much more often than you were before 2020. According to a recent report by McKinsey & Co, the food delivery market has nearly tripled since 2017. Therefore, Olo's growth looks like it could continue as food delivery and online ordering grows as the primary way consumers order food.
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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