To say the stock market has been volatile in recent weeks would be a bit of an understatement. As you watch stock prices rise and fall dramatically over the course of a week while the coronavirus crisis unfolds, it's hard to know exactly what to do with your money.

After careful consideration, though, I've decided on two tactics I plan to stick with during the crisis. And depending on your situation, the approach I've chosen could possibly work for you as well.

Image source: Getty Images.

My investment accounts have lost quite a bit of money in recent weeks. In fact, one account primarily invested in index funds erased basically all of the gains over the past several years, and I'm now slightly down on an account I was up over 10% on at the end of February.

While it's hard to watch my balance fall without being tempted to take all the money out so I don't suffer any further losses, I'm making no changes at all to my current investments.

That's because I'm invested in a diverse mix of different assets and I have an appropriate amount of stock exposure relative to my age and retirement goals. I was confident in my investment strategy before the crisis started, and I know I'm still doing the right things to earn around a 7% to 8% average annual return over time.

There's no reason for me to sell stocks during an emotional time or to make changes to a well-balanced portfolio just because I'm nervous about the economy in the short term.

Not only am I not selling any of my investments, but I'm also increasing the amount of money I'm putting into the stock market. And I'm doing this by buying more of each of my index funds every two weeks.

I normally make regular contributions and purchase a little more of each index fund I'm currently invested in every time I do that. I've simply increased those contributions and am continuing to up my stake on a fixed schedule.

I'm doing this because I know it's really difficult to figure out what days the market will move up and what days it will decline. And it's impossible to try to time when stocks will hit bottom.

I personally think the market is likely to keep going down for a while because the economic fallout of social distancing will be far-reaching. But since I don't have a crystal ball, I don't know when the recovery will start. I'm also not worried about it because, with my steady schedule of investing, chances are good I'll get a great deal on at least some of my investments.

And yes, I'll pay more if I buy on an up day, but I'm a long-term investor putting money into the market that I won't need for more than a decade. Over time, it won't much matter if I paid slightly more than I could have for some of my shares. I'm confident my account balance will grow as expected based on historical trends. And by buying now during an unprecedented crisis when stocks are on sale, I may even beat my projections on some of those investments.

Staying the course and increasing my investing are the right choices for me because I'm confident in my strategy and I already have accessible emergency savings for the short term.

If you're in a similar situation, you may also decide to keep your current investments as they are and to add more money to the market on a regular basis. This strategy is likely to pay off, if it's one you're in a financial position to pull off.

Go here to read the rest:
This Is How I'm Handling My Investments During the Coronavirus Crisis - The Motley Fool

C&D International Investment Group (HKG:1908) shareholders are no doubt pleased to see that the share price has had a great month, posting a 34% gain, recovering from prior weakness. And the full year gain of 13% isn't too shabby, either!

All else being equal, a sharp share price increase should make a stock less attractive to potential investors. In the long term, share prices tend to follow earnings per share, but in the short term prices bounce around in response to short term factors (which are not always obvious). So some would prefer to hold off buying when there is a lot of optimism towards a stock. Perhaps the simplest way to get a read on investors' expectations of a business is to look at its Price to Earnings Ratio (PE Ratio). Investors have optimistic expectations of companies with higher P/E ratios, compared to companies with lower P/E ratios.

See our latest analysis for C&D International Investment Group

C&D International Investment Group's P/E of 5.19 indicates relatively low sentiment towards the stock. The image below shows that C&D International Investment Group has a lower P/E than the average (6.2) P/E for companies in the real estate industry.

SEHK:1908 Price Estimation Relative to Market April 19th 2020

Its relatively low P/E ratio indicates that C&D International Investment Group shareholders think it will struggle to do as well as other companies in its industry classification. Since the market seems unimpressed with C&D International Investment Group, it's quite possible it could surprise on the upside. It is arguably worth checking if insiders are buying shares, because that might imply they believe the stock is undervalued.

Generally speaking the rate of earnings growth has a profound impact on a company's P/E multiple. When earnings grow, the 'E' increases, over time. Therefore, even if you pay a high multiple of earnings now, that multiple will become lower in the future. Then, a lower P/E should attract more buyers, pushing the share price up.

C&D International Investment Group's earnings per share grew by 3.1% in the last twelve months. And its annual EPS growth rate over 5 years is 89%.

One drawback of using a P/E ratio is that it considers market capitalization, but not the balance sheet. That means it doesn't take debt or cash into account. In theory, a company can lower its future P/E ratio by using cash or debt to invest in growth.

Such expenditure might be good or bad, in the long term, but the point here is that the balance sheet is not reflected by this ratio.

C&D International Investment Group's net debt is considerable, at 278% of its market cap. This level of debt justifies a relatively low P/E, so remain cognizant of the debt, if you're comparing it to other stocks.

C&D International Investment Group has a P/E of 5.2. That's below the average in the HK market, which is 9.6. It's good to see EPS growth in the last 12 months, but the debt on the balance sheet might be muting expectations. What we know for sure is that investors are becoming less uncomfortable about C&D International Investment Group's prospects, since they have pushed its P/E ratio from 3.9 to 5.2 over the last month. If you like to buy stocks that could be turnaround opportunities, then this one might be a candidate; but if you're more sensitive to price, then you may feel the opportunity has passed.

Story continues

Investors should be looking to buy stocks that the market is wrong about. If the reality for a company is not as bad as the P/E ratio indicates, then the share price should increase as the market realizes this. So this free visualization of the analyst consensus on future earnings could help you make the right decision about whether to buy, sell, or hold.

You might be able to find a better buy than C&D International Investment Group. If you want a selection of possible winners, check out this free list of interesting companies that trade on a P/E below 20 (but have proven they can grow earnings).

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

See the article here:
What Is C&D International Investment Group's (HKG:1908) P/E Ratio After Its Share Price Rocketed? - Yahoo Finance

April 19, 2020

Steven Bleibergis Managing Director and Portfolio Manager at Epoch Investment Partners, Inc. He is involved with the design and development of investment strategies and is a contributor to Epochs thought leadership.

Earlier, he was a portfolio manager at Legg Mason responsible for managing $7.5 billion in various asset allocation-based funds including Target Risk, Target Date and Dynamic Risk Management.

Prior to that, he was the head of investment strategy at Citigroup Asset Management and a portfolio manager at Credit Suisse Asset Management.

He is a co-author ofWinning at Active Management: The Essential Roles of Culture, Philosophy and Technology. He received a bachelors degree from Harvard and a masters degree from the Sloan School of Management at MIT, with a concentration in finance.

In this 3,678 word interview, exclusively with the Wall Street Transcript, Mr. Bleiberg reveals many of his top picks and the investment philosophy that determines them.

If you were going to go out and buy a business yourself to own 100% of it, how would you focus on it, or how would you make that decision, first, whether to do it and, second, how much to spend?

You would not look at what the accounting earnings are going to look like each year for the next 10 years. What you would want to know is: How much cash is it going to cost me out of pocket today to buy this business, and how much cash is going to flow into my pocket each year going forward?

Thats how you would analyze it. And to us, buying stocks, even though youre not going to be buying the whole company, thats still the right way to think about it because youre trying to figure out what is this business worth to me as an owner.

This leads Mr. Bleiberg to focus his stock picks on several high return strategies:

So with the strategy, which we call Capital Reinvestment, we might like a company such as Visa(NYSE:V) orMastercard(NYSE:MA) because they have very high margins.

If you think about their marginal cost if I go to the store, and I charge something on myVisacard, they collect their fee as a percentage of what I spent at the store. But their marginal cost for processing that transaction is extremely low. I mean, this is all automated.

And so its a very high-margin business. So thats what drives the high return on invested capital there.

Get all the most important picks from Epoch Investment Partners by reading the entire 3,678 word interview, exclusively with the Wall Street Transcript.

Read the original post:
Epoch Investment Partners Has the Right Attitude to Owning Their Portfolio - The Wall Street Transcript

Many Americans will soon be receiving a coronavirus stimulus payment from the IRS. Depending on your income, you could receive up to $1,200 per adult and an additional $500 per child dependent in your household.

When you get this big, lump-sum payment, you'll have to decide what to do with it. You have three options, and the right one will depend on your existing financial situation.

Image source: Getty Images.

The stimulus check is meant to provide income for Americans who need it because coronavirus adversely affected their finances. If you've lost your job, unemployment benefits haven't started yet, and you need money to cover food or bills immediately, spending your check is the right option.

It's true that most creditors will work with you now, suspending late fees and allowing you to put loans into forbearance so you won't have to make payments. Most renters also are protected by federal or state moratoriums on eviction, and utility companies generally can't cut off power during the coronavirus crisis.

But that doesn't mean you shouldn't pay your bills if you can -- even if you need your stimulus money to do so. Interest won't stop accruing on your debt even if it's put into forbearance (except for most federal student loans), and rent and utility payments will continue to be due (the amount you owe won't just be forgiven). So, if you stop paying now, you could end up owing a lot later, which would make it harder to get back on your feet financially.

If you have the money to cover your bills but you have no liquid emergency savings, or your emergency fund is very small, the best thing to do with your check is put it in the bank.

You don't want to make your money inaccessible to you by investing in assets you can't easily get out of. And since the stock market is very volatile right now, you don't want to invest it and risk losing some of it right away in case you end up needing it.

If you have emergency savings sufficient to cover three to six months of living expenses, and you don't need your stimulus money to pay bills, investing your check is likely your smartest choice.

Investing your money now enables you to take advantage of the economic downturn to get into index funds or buy stocks of great companies at potentially discounted prices. There are some great investment buys you could take advantage of right now, even with as little as the $1,200 the stimulus money provides.

You could use the money to bulk up your retirement accounts, depositing it into your IRA and scoring tax savings. Or you could open a taxable brokerage account if you want to be able to access the funds before age 59 1/2.

Just be sure not to invest money you're likely to need in the next five years, as you want to make sure you can leave the cash invested long enough to recover from any market downturns.

Your stimulus money is meant to help improve your financial situation, and it can do that whether you use it now to avoid consumer debt or invest it to build a more secure future.

Choosing whether to save or invest your stimulus money will depend on whether you're currently in a good financial position or if you need a little extra help to shore up your finances during troubled economic times.

Originally posted here:
Should You Save or Invest Your Stimulus Money? - The Motley Fool

One conundrum that some investors face is how to capture the safety of bonds while trying to get in on riskier stock-like returns.

Enter convertible bonds.

These hybrid investments are corporate-issued bonds that pay interest generally higher than U.S. Treasury rates but lower than those on regular corporate bonds. After a predetermined length of time usually four to seven years or when the company's shares reach a certain price, the convertibles convert to a certain amount of stock.

"They give you the opportunity to get upside potential but also downside protection," said Zachary Patzik, a fixed income strategies analyst at Morningstar. "If you look at how the performance has been over the years, it's been a pretty solid stream for investors."

Image Source | Getty Images

The U.S. convertible bond market is worth about $200 billion, a small slice of the full investing universe. While there are mutual funds and exchange-traded funds that focus on convertibles, other funds or investment managers also use them as part of a broader strategy.

Convertible bonds are not without risk. Often, the companies issuing them may have weaker credit ratings, or have generally less immediate financial soundness but good growth potential.

Cruise line operator Carnival, for instance, recently issued $1.75 billion in convertible bonds with a 5.75% interest rate. The company has taken a big hit to revenue as the coronavirus pandemic and resulting economic fallout has upended the travel industry. Carnival's stock price has plummeted this year to about $12.50 from above $38, a drop of about 75%.

While Carnival may very well recover, an investor in any convertible bond runs the risk that the issuing company will go belly up before the conversion happens. Of course, there's always the bankruptcy danger with individual stocks, as well.

"If you're looking for bond exposure, where you want a portion of your portfolio to not behave like stocks, then convertibles aren't what you should be buying," said certified financial planner Kashif Ahmed, president of American Private Wealth in Bedford, Massachusetts. "When stocks fall, convertibles do, as well."

The Standard & Poor's 500 index, a broad measurement of how U.S. companies are faring, was down 20% in the first quarter. Likewise, the Dow Jones industrial average was down about 23% in that time period.

While convertible bonds slid, as well, the loss was less: a bit under 13% in the convertible funds tracked by Morningstar.

"We like them because they ameliorate risk," said CFP David Demming, founder and president of Demming Financial Services in Aurora, Ohio. "They provide the opportunity to earn high single digits or even maybe low double digits.

"They won't be the highest-performing, but they add a different dimension to your portfolio."

Of course, with economic conditions worsening in the U.S. and questions over whether all hard-hit companies will come out of this intact, it's worth being cautious.

"In this environment, if convertible bonds are available at a reasonable price, smart managers aren't just blindly buying them, they buy what's attractive," Demming said.

More from Personal Finance: Can't keep up with insurance premiums? Here's what to do What you should know about the cost of coronavirus treatment What to expect if you have a 401(k) loan and lose your job

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Coronavirus-panicked investors may turn to this investment to get the best of both stocks and bonds - CNBC

Ron Basu, left, and Christopher Toomey of Morgan Stanley Private Wealth Managements Team Global Photograph by David Vintiner

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For partners Ron Basu, Rachael Naylor, and Christopher Toomey at Morgan Stanleys Team Global, having skin in the game is critical. We invest alongside our clients, so we feel the pain and the gain, Basu says. Launching the practice in 2008 with a focus on the needs of the ultrawealthy, the trio has built a team of 16 who oversee $7.4 billion in assets.

Barrons: Has the pullback prompted changes in how youre investing?

Ron Basu: Our overall allocation hasnt changed a whole lot, but we have been buying the dips carefully. With regard to equities, weve been focused on quality global stocks. In fixed income, weve trimmed high-yield exposure over time [in favor of] Treasuries and short-term investment grade.

The Covid-19 pandemic has forced us all to work differently, including Barrons. To ensure the safety of the subjects and photographers, all portraits were directed and captured via video conferencing software.

Christopher Toomey: With the pullback, there are great opportunities in the fixed-income space in high-quality companies with great balance sheets. Theres going to be a tremendous opportunity in creditin particular distressed creditas we get through phase one, which is the health crisis, and move to stage two, the economic crisis.

You have up to 40% in alternative investments. Has that hurt or helped as markets sank?

Basu: We see opportunity for alpha generation in alternatives. A large percentage of our multimanager and multistrategy portfolios are doing exceptionally well.

Read the whole package

What kinds of risks do your clients face?

Toomey: Many wealthy individuals have large concentrated exposures. In some cases, its a private business with particular exposure to an industry or risk. In others, it is tax liabilitylow cost-basis stock, for example. One risk for foundations and individuals is the continued correlation of assets. It used to be that there were greater dispersions between stocks and bonds. With the proliferation of passive strategies and aggressive monetary stimulus, we are seeing these historical relationships break down, leading to more risk across portfolios.

One solution is to diversify into alternative strategies and add structures that have less liquidityI know, that seems counterintuitive. Certain investment opportunities require longer to exploit; more-liquid structures can cause managers to be forced sellers at exactly the wrong time.

What are the key characteristics of your clients and your team?

Basu: Weve doubled in people, assets, and complexity in the past five years. About 50% of our clients are U.S. families and institutions and 50% are non-U.S. resident clients. Our team also has a global perspective. Its like a mini United Nations.

Thank you both.

N = Not ranked; PWM = Private Wealth Management

Use the scrollbar at the bottom of the table to view all columns.

Email: editors@barrons.com

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Barrons Top 100 Advisors: Finding Opportunities in Alternative Investments - Barron's

A lot of people are talking aboutGilead Sciences (NASDAQ:GILD) these days. The big biotech's antiviral drug remdesivir has made headlines because of its promise in treating novel coronavirus disease COVID-19. Some people had never even heard of Gilead before its COVID-19 program garnered widespread publicity.

But Gilead Sciences has been around a long time. The company was founded in 1987. It's also made early investors quite wealthy. Gilead conducted its initial public offering (IPO) at the end of January in 1992. Here's how much money you'd have now if you'd invested $10,000 in Gilead's IPO.

Image source: Getty Images.

Gilead Sciences priced its shares at $15 before its IPO. However, the biotech stock opened for trading at a little over $22 per share -- a gain of nearly 47% right off the bat for early investors.

The euphoria didn't last very long. Gilead lost roughly half of its market cap over the next few months. The stock rebounded, though, and finished its first calendar year of trading up 28% from its IPO price.

Over the next few years, Gilead continued to take shareholders on a roller coaster ride. But in 1995, the stock took off. Gilead's shares were highly volatile during the rest of the decade but trended up sharply overall.

The dawn of the 21st century ushered in a golden period for Gilead Sciences. Its stock skyrocketed. By mid-2008, Gilead was up by a staggering 5,660% adjusted for stock splits. Like many stocks, the financial crisis of 2008 and 2009 weighed on the biotech's shares. But that was only temporary.

Gilead stock went on to hit an all-time high in June 2015. At that point, anyone who had invested $10,000 in the company's IPO and held on would have had a position worth nearly $2.6 million. Unfortunately, it was mainly downhill from there. Still, though, a $10,000 investment in Gilead's IPO would now be worth nearly $1.8 million. That's a ginormous return of more than 17,800%.

Gilead won its first FDA approval in 1996 for Vistide in treating AIDS patients with cytomegalovirus retinitis, an inflammatory eye disease that can cause blindness. Vistide was the beginning of a long and successful road for Gilead in treating HIV-related conditions.

The biotech's rapid rise in the early 2000s stemmed from the launches of HIV drugs Viread (in 2001) and Truvada (in 2004). In 2006, the FDA approved Atripla -- a combination of Truvada and Bristol Myers Squibb's Sustiva.

Gilead also made some key acquisitions along the way that enabled it to move into new therapeutic areas. One of the most significant of these was the 2009 purchase of CV Therapeutics, a deal that brought cardiovascular drug Ranexa into Gilead's lineup.

But the most important acquisition by far for Gilead was its buyout of Pharmasset in 2011. That deal led to Gilead launching Sovaldi in 2013. Sovaldi was the first drug to cure hepatitis C. It was followed by Gilead's other hepatitis C virus (HCV) drugs Harvoni, Epclusa, and Vosevi.

By the second half of 2015, though, it became obvious that Gilead would be a victim of its own success. There were fewer HCV patients because so many had been cured by Gilead's drugs and new rivals that had entered the picture. Gilead's HCV franchise sales soon began to sink, dragging down the company's overall revenue, earnings, and share price.

However, Gilead still had its powerhouse HIV franchise. The company launched a new generation of HIV drugs, culminating in the introduction of Biktarvy in 2018. Biktarvy is on track to become the most successful HIV drug to date.

Gilead also continued to invest in business development. Its 2017 acquisition of Kite Pharma made Gilead an instant leader in the promising area of cell therapies for treating cancer.

HIV remains a core area of focus for Gilead Sciences. The biotech is developing a long-acting capsid that could be a major catalyst in the not-too-distant future. Gilead is also evaluating drugs that could potentially cure HIV in early stage clinical studies.

There are two things to watch with Gilead in the near term. The company expects to soon announce results from late-stage testing of remdesivir in treating COVID-19. Positive news wouldn't just be good for Gilead; it would be good for the world as countries continue to battle the coronavirus pandemic.

Gilead also awaits U.S. and European approvals for filgotinib in treating rheumatoid arthritis. The drug is widely expected to become a megablockbuster. Filgotinib, and Gilead's close partnership with its developer, Galapagos, could put the big biotech in a prominent position in the huge immunology market.

Don't look for the staggering returns from Gilead that it's delivered over the past 28 years. However, with solid growth prospects plus a nice dividend, the biotech stock seems likely to deliver good total returns to investors over the next decade.

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If You Invested $1000 in Gilead Sciences' IPO, This Is How Much Money You'd Have Now - Motley Fool

Today we are going to look at Dover Motorsports, Inc. (NYSE:DVD) to see whether it might be an attractive investment prospect. Specifically, were going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business.

First of all, well work out how to calculate ROCE. Then well compare its ROCE to similar companies. And finally, well look at how its current liabilities are impacting its ROCE.

ROCE measures the return (pre-tax profit) a company generates from capital employed in its business. All else being equal, a better business will have a higher ROCE. Ultimately, it is a useful but imperfect metric. Author Edwin Whiting says to be careful when comparing the ROCE of different businesses, since No two businesses are exactly alike.

Analysts use this formula to calculate return on capital employed:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) (Total Assets Current Liabilities)

Or for Dover Motorsports:

0.078 = US$6.1m (US$82m US$4.8m) (Based on the trailing twelve months to December 2019.)

Therefore, Dover Motorsports has an ROCE of 7.8%.

View our latest analysis for Dover Motorsports

ROCE is commonly used for comparing the performance of similar businesses. It appears that Dover Motorsportss ROCE is fairly close to the Hospitality industry average of 8.5%. Aside from the industry comparison, Dover Motorsportss ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. Investors may wish to consider higher-performing investments.

The image below shows how Dover Motorsportss ROCE compares to its industry, and you can click it to see more detail on its past growth.

When considering this metric, keep in mind that it is backwards looking, and not necessarily predictive. ROCE can be misleading for companies in cyclical industries, with returns looking impressive during the boom times, but very weak during the busts. ROCE is only a point-in-time measure. How cyclical is Dover Motorsports? You can see for yourself by looking at this free graph of past earnings, revenue and cash flow.

Current liabilities include invoices, such as supplier payments, short-term debt, or a tax bill, that need to be paid within 12 months. Due to the way the ROCE equation works, having large bills due in the near term can make it look as though a company has less capital employed, and thus a higher ROCE than usual. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets.

Dover Motorsports has current liabilities of US$4.8m and total assets of US$82m. Therefore its current liabilities are equivalent to approximately 5.8% of its total assets. With low levels of current liabilities, at least Dover Motorsportss mediocre ROCE is not unduly boosted.

If performance improves, then Dover Motorsports may be an OK investment, especially at the right valuation. You might be able to find a better investment than Dover Motorsports. If you want a selection of possible winners, check out this free list of interesting companies that trade on a P/E below 20 (but have proven they can grow earnings).

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

The rest is here:
What Can We Learn From Dover Motorsports, Inc.s (NYSE:DVD) Investment Returns? - Simply Wall St

With the stock market still down significantly off its highs from earlier this year, there are still a lot of attractive stocks that you could buy. But with a limited amount of money available to invest, you have to be very picky. Many investors don't have enough cash to scoop up shares of 20 or 30 different stocks.

The good news is that you don't have to have a huge cash stockpile and you don't have to buy a lot of stocks in one fell swoop. Here are three great stocks to buy even if you have less than $5,000 to invest.

Image source: Getty Images.

Sure,Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) share price stands at a little under $1,300 right now. But it's no problem at all if you're only able to buy one or two shares of Alphabet. You'll get a lot with your investment

Alphabet is known for its enormously popular apps and websites, including Google Search, YouTube, and Gmail. The company's Android operating system also powers nearly 87% of all smartphones, according to market researcher IDC. However, there's a lot more to Alphabet than these products that many Americans use everyday.

The company's Google Cloud business, which provides cloud hosting services to organizations, is growing rapidly. Although Google Cloud still trails well behind the two biggest players in the cloud market, Amazon.comand Microsoft, Alphabet has its target set on at least claiming the No. 2 spot in the future.

Alphabet's Waymo unit is the leader in self-driving car technology and should become a huge moneymaker over time. The company also could emerge as an important player in healthcare, with Verily teaming up with big partners to use data to tackle healthcare issues and Calico working on extending the human life span. Few companies claim the wide array of growth opportunities along with a strong moat for its existing businesses that Alphabet does.

Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) could serve as the poster child for getting a lot with your investment. Warren Buffett's company owns close to 60 businesses spanning a wide range of industries, including Dairy Queen, GEICO, Fruit of the Loom, and Precision Castparts.

The big conglomerate also has a huge investment portfolio. Berkshire owns stakes in over 40 stocks representing the airline, auto, banking, consumer goods, energy, healthcare, and technology sectors. Buying Berkshire Hathaway stock is almost like buying an exchange-traded fund (ETF).

There are two classes of Berkshire Hathaway shares -- class A and class B. If you have less than $5,000 to invest, you can forget about the class A shares. One Berkshire class A share currently trades for close to $285,000. However, Berkshire class B shares are much more affordable at less than $200 per share.

What I like the most about Berkshire is that the company has a lot of cash to use in buying stocks at attractive prices. Warren Buffett views market downturns as opportunities instead of problems. I expect that when Berkshire's next regulatory filing disclosing its holdings is submitted, we'll see plenty of purchases that could lead to market-beating returns over the next few years.

Now for a twist. MongoDB (NASDAQ:MDB) isn't nearly as well-known as Alphabet or Berkshire Hathaway. The database company is only a fraction of the sizes of those two giants. But MongoDB's smallness when compared to its market opportunity makes the stock very appealing, in my view.

IDC projects that the global database market will reach $97 billion by 2023, up from $71 billion this year. MongoDB currently claims only a sliver of that market -- a market share of less than 1%. However, the company's market share is growing faster than its much larger rivals.

One reason why MongoDB's growth rate tops its bigger competitors is that the company designed its database from the ground up to handle unstructured data. The market-leading databases were originally developed decades ago when data could be stored neatly into rows and columns. Today's world, with images, videos, and unstructured text, can't be handled as effectively with the approaches of the past. That gives MongoDB a solid competitive advantage.

In addition, MongoDB built its database to be run from anywhere, including the cloud. The company's primary growth driver is its Atlas cloud-based database-as-a-service platform, which makes it easy for customers to manage and store data in the cloud. As more organizations move their apps and data to cloud environments, I expect MongoDB's market share will grow much larger. Buying this smallgrowth stock now should pay off in a big way over the long run.

Link:
3 Stocks to Buy If You Have Less Than $5,000 to Invest - Motley Fool

Even as stocks regain ground from March's historic bear market plummet, there's still time to invest in great companies at prices that are attractive when considered relative to their potential for outsized returns. The broader market decline punished both good stocks and bad, but there are plenty of companies with remarkable growth prospects.

But what stocks have the biggest chance of delivering impressive returns? I believe that $3,000 (or less) invested in each of these three stocks will make investors a small fortune over the next 10 years.

Image source: Getty Images.

As more and more employees are forced to work from home, preventing large-scale data breaches has never been more important. Workstaffs are accessing computer systems remotely in greater numbers than ever before; ensuring their logins are genuine could be the difference between business as usual and a debilitating intrusion by hackers. That's where Okta (NASDAQ:OKTA) (pronounced Ahk-tuh) comes in.

The company's cloud-based identity management service handles the user authentication for employees, contractors, and customers across more than 6,500 business software applications, all with a single, secure login process.

Last year, Okta was named the industry leader in access management, beating out some of the biggest names in the field for the third year running according to research company Gartner,while Forrester Research came to a similar conclusion, finding it the top Identity-as-a-Service (IaaS) provider.

Okta closed out 2019 with a bang, with revenue that grew 45% year over year, while subscription revenue climbed even faster, up 46%.The company continues to gain converts, as its customer count grew 30% compared to the prior-year quarter. Even more importantly, large enterprise-level customers grew even faster, as those with contracts over $100,000 grew 41%. Additionally, Okta's dollar-based retention rate was 119% last quarter, showing that once onboard, satisfied customers tend to spend even more.These two factors combined will help Okta super-charge its growth.

Image source: Roku.

There's little doubt cord-cutting is accelerating. Last year, the major pay-TV providers lost more than 4.9 million customers, the largest single-year loss in history, according to data gathered by Leichtman Research Group.That followed declines of 2.87 million in 2018 and 1.49 million in 2017. So the movement continues to gain steam. One of the biggest beneficiaries of this trend is Roku (NASDAQ:ROKU).

While Roku is well known for its set-top boxes and dongles that make access to streaming services a breeze, investors may not be aware that the company makes the bulk of its money from advertising. While its overall revenue grew 49% year over year in the fourth quarter, platform revenue -- which includes advertising, The Roku Channel, and its smart TV operating system (OS) -- soared 71%.

Speaking of smart TVs, the company is simply dominating the space, with the Roku OS found in one-in-three devices sold in the U.S. last year, accelerating from one-in-four the prior year, giving viewers stuck at home an easy way to access their favorite streaming services.

The company'spreliminary Q1 results tell the tale. Active accounts grew by 37% year over year to about 40 million, while streaming hours grew by an estimated 49%.With millions of consumers sheltering at home, Roku is providing easy access to a much-needed respite.

Image source: Getty Images.

The world is changing, and data no longer fit neatly into the tight little rows and columns of historical databases. Modern data are messy, with photos, video, and even entire documents, bucking convention and refusing to fit within the confines of a cell. MongoDB (NASDAQ:MDB) solves that 21st-century problem.

While traditional databases are stuck in the past, MongoDB can handle data pulled in from a variety of sources, helping empower developers and the apps they create. MongoDB offers a free community server that gives customers a taste of what it can do. But it's the company's cloud-based, fully managed database-as-a-service product -- Atlas -- that's at the heart of the company's massive growth.

In the fourth quarter, MongoDB reported revenue that grew 44% year over year, while subscription revenue climbed 46%. Those results are remarkable enough, but the revenue generated by Atlas soared 80% year over year and now represents 41% of the company's total revenue. Not bad for a three-year-old product. The company also said it was seeing "minimal impact" and has continued to close transactions, even in the areas hardest hit by COVID-19.

If that weren't enough, consider this: MongoDB CEO Dev Ittycheria said the company operates in one of the largest and fastest-growing software spaces, with a total addressable market that's expected to grow from $71 billion in 2020 to $97 billion by 2023, citing data from IDC.

The position of disruptor in a large and growing market is an enviable one to be in, suggesting that MongoDB is just getting started.

Each of these companies represents something of a high-risk, high-reward proposition. Like with many high-growth young companies, these are by no means cheap. Okta, Roku, and MongoDB are selling at 29, 13, and 20 times sales, respectively -- when a good price-to-sales ratio is generally between 1 and 2. Additionally, none of these companies is currently profitable, instead opting to spend their limited resources securing future growth.

In each case, however, investors have been willing to pay up for stellar topline growth and the potential that these stocks could make investors a fortune over the coming decade.

Link:
$3,000 Invested in These 3 Stocks Could Make You a Fortune Over the Next 10 Years - The Motley Fool