Ladies and gentlemen, put away the day trading software, for there’s a slower yet potentially more lucrative way to traverse the stock market landscape. The performance of savvy investors who focus on robust, long-term stocks provides us with a prime example. These investors prioritize sustained growth over instant gratification. Their strategy centers on cultivating income to bolster portfolio contributions down the road. Why chase rabbits when there’s gold waiting to be mined in the long run?
Celsius Holdings (CELH)
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Celsius Holdings (NASDAQ:CELH) has struck gold in the domain of healthy sports drinks, a domain increasingly capturing the attention of Gen Z and a wider audience. Their beverage, fortified with seven essential vitamins, boldly omits sugar, high fructose corn syrup, artificial colors, and aspartame. The company compensates by saturating their drinks with a generous dose of caffeine.
Positioning itself as the vanguard of healthy energy drinks, Celsius is adept at gaining market share as consumers clamor for health-conscious options without sacrificing taste. Evidence of this is found in its astonishing 104% year-over-year revenue growth in the third quarter of 2023. One doesn’t come across such explosive growth unless the product on offer satiates the palate, does one?
For the discerning shareholder, Celsius Holdings has proven to be a veritable gold mine. The equity has seen a meteoric ascent of 5,247% over the past five years. While the stock has been relatively static in recent months, such dormancy only fortifies its allure heading into earnings.
Visa (V)
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Then we come to the steadfast Visa (NYSE:V), an emblem of stability and growth for those orienting themselves toward the long term. Credit and debit cards are entrenched in modern society as the payment method of choice for scores of consumers. And who can resist the allure of those cashback rewards and other perks that these cards bring?
Visa’s latest earnings report is a harbinger of its robustness. Revenue surged by 9% year-over-year in Q1 FY24, while GAAP net income enjoyed a similar 17% boost over the same period. The growth in GAAP EPS outpacing GAAP net income stems from the company’s proactive stance in repurchasing shares.
To affirm its confidence in the market, Visa procured $3.4 billion worth of shares in the quarter. During this period, the fintech behemoth also distributed dividends worth $1.06 billion and augmented its dividend by a striking 15.5% year-over-year in late 2023. This translated to a hefty leap in the quarterly dividend per share from $0.45 to $0.52.
In tracking Visa’s steady climb, we observe a 21% surge over the past year and a formidable 92% growth over the past five years.
Alphabet (GOOG, GOOGL)
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The acclaimed advertising juggernaut, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), beckons to discerning shareholders poised for the long haul. The company has recently tasted the sweet fruits of a 13% year-over-year revenue upswing in Q4 2023, starkly contrasting with a mere 1% year-over-year growth rate in the preceding period.
These revenues from advertisements are projected to soar even further in 2024, courtesy of events such as the Olympics, Elections, and sundry other factors. Despite ad sales constituting a lion’s share of Alphabet’s revenue, the company has judiciously reinvested its earnings in diverse ventures.
The Financial Giants: Tech and Fintech Standouts
When it comes to roaring successes in the financial and technological spheres, Alphabet, Microsoft, Mastercard, and Elf Beauty certainly stand among the proverbial giants. Alphabet has seen remarkable growth, with its cloud revenue soaring from $7.3 billion to $9.2 billion year-over-year. What’s more, this component of the business even became profitable recently, further strengthening Alphabet’s position in the market.
Alphabet: Sowing the Seeds of Growth
Alphabet’s decision to continue funding “Other Bets,” a category filled with high-growth opportunities, speaks volumes about the company’s visionary approach. These “Other Bets” may not be profitable currently, but there’s potential for them to sprout into significant segments in the future. In the financial world, Alphabet has been a steadfast presence, with shares surging by an impressive 57% over the past year and a staggering 167% over the past five years. Clearly, this tech giant has been a reliable choice for many investors.
Microsoft: A Beacon of Stability and Growth
Meanwhile, Microsoft has been shining brightly, delighting investors with its robust top-line and bottom-line growth. The tech behemoth reported exceptional 18% year-over-year revenue growth and a remarkable 33% year-over-year net income growth in the second quarter of fiscal 2024. CEO Satya Nadella attributed this success to “applying AI at scale,” a strategy that has not only attracted new customers but also generated productivity gains across every sector. With Microsoft Cloud playing a pivotal role in this triumph, where cloud revenue swelled by 24% year-over-year and accounted for more than half of the total revenue, it’s no wonder that Microsoft’s value has soared. The company currently boasts a market cap over $3 trillion and has witnessed its shares rallying by 49% over the past year and soaring by 275% over the past five years.
Mastercard: Navigating the Fintech Seas
Mastercard stands tall in the world of credit and debit card industry, flaunting enviable profit margins. The company rounded off 2023 with a commendable 13% year-over-year revenue growth and 11% year-over-year net income growth, maintaining a net profit margin above 40%. Investors have reaped rewards, with the stock registering a 26% gain over the past year and a formidable 109% surge over the past five years. Beyond dividends, Mastercard also repurchased 4.5 million shares for $1.8 billion, signaling an enterprising move. CEO Michael Miebach pointed to strong consumer spending and cross-border volume growth as the key drivers for the successful quarter, underlining the company’s multifaceted approach to sustaining growth.
Elf Beauty: A Fairy Tale Growth Story
Investors often rely on historical performance to gauge the potency of a stock, and Elf Beauty’s trajectory has been nothing short of a fairy tale. The stock has witnessed a staggering 123% gain over the past year and a jaw-dropping 1,678% surge over the past five years. In the recent Q3 FY24 report, Elf Beauty cemented its stature as a growth powerhouse, boasting an 85% year-over-year net sales growth and a mind-boggling 184% year-over-year net income growth. The numbers are undeniably alluring, making Elf Beauty a stock that investors are flocking to in droves.
Brilliance Continues – The Unstoppable Ascent of Duolingo (DUOL)
The beauty sector is currently experiencing a significant shareholder victory. ELF Beauty, for instance, marked the 20th consecutive quarter in which Elf Beauty gained market share and reported net sales growth. Such a phenomenal track record makes the stock more promising for long-term investors. Shares currently trade at a 48.5 forward P/E ratio that can get lower as the firm continues to deliver impressive results.
Duolingo Dazzles in Demand-Driven Growth
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Duolingo (NASDAQ:DUOL) offers compelling growth in a high-demand vertical. The company’s language learning app grew its revenue by 43% year-over-year in the third quarter of 2023. Duolingo also experienced a significant surge in its active users. Monthly active users were up by 47% year-over-year, while daily active users increased by 63% year-over-year.
The company’s financial growth and business opportunities will attract growth investors. The only concern is the stock’s valuation. Duolingo currently trades with a 93-forward P/E ratio. That’s not for everyone, but the valuation will become more manageable within a few years.
Long-term investors may want to nibble on the stock and build positions as the valuation becomes easier to justify. The asset will look more attractive on pullbacks. While this is true about any stock, Duolingo has the distinction of meaningful revenue and net income growth. Not every publicly traded corporation can make that same claim.
On this date of publication, Marc Guberti held long positions in CELH, GOOG, MSFT, and ELF. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
