Some companies that are radically changing our consumption patterns are establishing themselves as leaders in a new sector of which they have pioneered. These success stories are accompanied by a colossal return on investment for the shareholders who invested at the beginning of the adventure. But until when is such an investment worth it? Take the example of Netflix, Tesla or Amazon: these 3 stocks would have made you rich if you had invested 10 years ago. What if you invest now?
A successful business model that attracts support
First, it should be remembered that these brands have established themselves as the leader in their sector, which they have helped to create, even to popularize or to democratize: e-commerce for Amazon, video streaming content for Netflix, the electric car for Tesla. They have become world benchmarks because they have been able to offer an offer that meets the expectations, desires and needs of consumers.
In practice, this translates into constant growth in turnover, the number of customers, and often also the net profit even if young innovative companies sometimes tend to reinvest all the profits in research and development, or even marketing and sales. Still, these indicators are particularly popular with growth investors, that is to say investors who position themselves on growing companies.
Also discover our article How to invest in the stock market in your favorite brands?
A bullish stock price that makes all savers dream
This interest of investors in growth for this type of company contributes, when all indicators are green, to pushing up the prices of stocks that show a significant increase in their turnover, their customers, and often also their profits. For example, Amazon has grown by almost 1,825% in 10 years, with price hovering around $ 50 in 2010 and now close to $ 3,500. Netflix has grown by nearly 1,925% in 10 years, with prices hovering around $ 8 in 2010 and now close to $ 550. Finally, Tesla has grown by almost 8,500% in 10 years, with a price of around $ 1.50 in 2010 and today close to $ 500. Dazzling progressions that have something to dream of investors!
Expensive paid titles that must continue their irresistible rise to be worth it
Be careful, however, before rushing to buy these titles! Trees do not rise to the sky and you cannot increase your customer base endlessly. For example, one in two products purchased via e-commerce in the United States is via Amazon, which therefore cannot reasonably expect to increase its US customer base by 80%. In addition, past performance is no guarantee of future performance and no company is immune from mishaps, changes in legislation or changes in consumer behavior, especially in the current health context. So be careful not to pay too much for a security that could see its growth stabilize, slow down, or even post losses and whose price would probably suffer.