Whether you’re into investing or not, there’s pretty much no chance you haven’t heard about Shopify (TSX:SHOP)(NYSE:SHOP) and its tremendous rise to the top. Since its initial public offering (IPO), the stock has risen about 1,215% as of writing, with the stock hitting the $460-per-share mark after earnings, on the tail of swinging around like a yo-yo during the past week.
It’s left many investors wondering if similar opportunities are out there. However, Shopify is one of those rare cases that has seen an explosion of growth in a very short period of time. It would be unrealistic to say I have a list of Shopifys for you today.
What I can recommend, however, are a few stocks that are in a similar market to Shopify and still offer a tremendous amount of growth in the near future. Each stock is at least involved with the world of e-commerce — an industry that is set to generate over US$138.7 billion by 2022. A word of warning though: just like Shopify, these stocks are fairly new in a fairly new industry, so there is definitely some risk involved. But the potential for huge rewards is just as great.
Lightspeed POS (TSX:LSPD) is a company that develops point of sale (POS) and analytics software, allowing clients to process sales and track goods, mainly for the retail and restaurant industry. Lightspeed already has a presence in about 100 countries around the world, working with mainly small- and medium-sized businesses, and that could expand even further. By 2025, researchers predict the POS market could be worth $108 billion. That puts Lightspeed in a firm position to grow right along with it, especially if it starts acquiring larger clients.
Since its IPO in March of this year, the stock has grown at a steady pace, increasing by 113% as of writing. A significant jump came after the company’s first post-IPO quarterly report, where Lightspeed reported 36% revenue growth and 40% increase in profit, both year over year. Beyond that, the company expects to grow revenue by a further 40% in 2020.
While Open Text (TSX:OTEX)(NASDAQ:OTEX) isn’t a new company, it certainly has found a foothold in this new industry. The company provides software products and services that help “digitize processes and supply chains through analytics and AI powered intelligence solutions for better decision making,” according to the company’s website.
Part of that better decision making means providing cybersecurity, an area pretty much every business on the planet needs today and in the future. That includes companies like Mastercard and Alphabet, both of which have partnered up with Open Text recently.
The stock has risen significantly since its IPO, but in the last few years as the company made a series of acquisitions the share price has skyrocketed. Since 2015, the stock has more than doubled by 122% as of writing. Frankly, it’s only the beginning for this company that has moved partially away from acquisitions and more towards huge partnerships like the one with Alphabet.
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Finally, out of right field comes a seemingly boring stock. WPT Industrial REIT (TSX:WIR.U) is just that: a real estate investment trust that focuses on light industrial properties. Those properties, however, are 70 warehouse and distribution facilities for many e-commerce companies.
As e-commerce grows, so will this already growing company, which is making acquisitions all over the place to prepare for the inevitable future. It even provides “pop-up warehouses” where companies can rent facilities close to their customer base without signing long-term contracts.
With an 11% year-over-year increase in net operating income, an occupancy rate of 99%, a 5.5% dividend, and an 8.3% increase in just one year on the market, this stock looks to be a solid long-term buy for those wanting to get in on e-commerce.
You don’t have to buy up Shopify to take advantage of the e-commerce boom. And you certainly don’t have to spend an arm and a leg to get in on it. Considering these three stocks gives you a great chance to ride the e-commerce high now and well into the future.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. 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, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. David Gardner owns shares of Alphabet (A shares). Tom Gardner owns shares of Alphabet (A shares), Mastercard, and Shopify. The Motley Fool owns shares of Alphabet (A shares), Lightspeed POS Inc, Mastercard, Shopify, and Shopify. Open Text, Mastercard, and Shopify are recommendations of Stock Advisor Canada. WPT is a recommendation of Dividend Investor Canada.