You don’t need to chase the latest hot trend in technology to make lots of money in stocks. Buying shares of emerging consumer brands before they are widely recognized is one of the best investment strategies — ask Peter Lynch. Three Motley Fool contributors were asked to come up with three promising long-term investments that also have near-term upside potential. Here’s why Cava Group (NYSE: CAVA), MercadoLibre (NASDAQ: MELI), and Dutch Bros (NYSE: BROS) made the cut.
The Rising Star in Fast Casual Dining
Jeremy Bowman (Cava Group): Cava Group is one of the more intriguing IPOs to come on the market recently. It’s a fast-casual chain that’s drawn comparisons to Chipotle Mexican Grill for good reason. Cava offers a similar menu to Chipotle, using Mediterranean cuisine instead of Mexican. It serves rolled-up pita wraps that closely resemble burritos and offers bowls, resembling Chipotle’s setting with its minimalist industrial decor. Cava’s financial results have been impressive, reporting a 52.5% increase in revenue in the latest earnings report. The company’s success is evident through robust growth in same-store sales and aggressive store openings.
Cava’s strong management team, including Panera Founder Ron Shaich, adds to its appeal. Despite a significant surge in stock price, Cava’s long-term growth potential and solid financial performance continue to attract investors.
The E-Commerce Giant in Latin America
Jennifer Saibil (MercadoLibre): E-commerce’s expansion presents vast opportunities for retailers. MercadoLibre, dominating e-commerce in Latin America, demonstrates consistent growth. With a strong customer base and increasing revenue, the company saw an 83% growth in the latest quarter. Its investment in logistics improved delivery times, enhancing customer loyalty and driving revenue growth.
MercadoLibre’s fintech segment is also flourishing, with substantial increases in payment volumes, benefiting its net income. Despite a temporary stock price dip post-earnings, smart investors recognize this as a buying opportunity for a promising stock.
The Up-and-Coming Restaurant Stock
John Ballard (Dutch Bros): Investing in budding restaurant chains early can yield significant returns. Dutch Bros, with its current U.S. footprint, mirrors Starbucks in its early days. The company’s revenue and sales growth indicate a promising future. Operating at a slight profit, Dutch Bros’ expansion potential sets the stage for explosive earnings growth.
Data by YCharts.
Dutch Bros, despite past valuation concerns, now appears attractively priced for growth. With improving earnings, the stock holds significant upside potential.
