No matter which way you cut it, the goal of every investor, especially stock pickers like yourself, is to make money. There will be many investing gurus out there that will try to sell you on a microcap stock with incredible potential. However, the trick is to invest in the right companies at the right time. 2021 is the right time for these three companies. In this article, I discuss why being bullish on these three stocks this year can make you rich.
I can’t get enough of this company
One of the largest positions in my portfolio, Shopify (TSX:SHOP)(NYSE:SHOP) is a proven winner. Before you accuse me of being biased with respect to its potential this year, hear me out. We are riding the tail end of a pandemic that has greatly influenced consumer behaviour. Yes, online shopping has been on the rise in recent years, but in 2020 the industry took the world by storm. Shopify merchants sold a total of $5.1 billion worldwide in the Black Friday-Cyber Monday weekend alone.
Coming off that success, Shopify launched full speed into the Christmas shopping season. With COVID-19 restrictions being reinstated around the world, during that time, online shopping undoubtedly saw another spike in traffic. The company reports earnings in the next couple weeks, and all signs seem to point to outstanding performance. The stock has already gained more than 4,400% since its IPO, but this is still just the beginning.
Renewable energy companies will continue to push forward
In 2020, renewable energy companies saw massive leaps forward, as investors anticipated a Joe Biden election win. Within that space, Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) remains one of the top players. The company has seen its stock rise as much as 220% over the past two years. For a “safe” dividend company, that performance beats even some of the top growth stocks.
Brookfield Renewable sets a goal of achieving 12-15% returns on an annual basis. As stated previously, the company has smashed those numbers out of the park over the past two years. In Q2 2020, Brookfield reported that it had successfully produced 18% returns on an annualized basis since inception. That number is sure to be higher today and should continue to rise, as renewable energies continue to see an increase in funding.
No denying this winner
One of the worst things you can do is ignore an excellent growth stock because it is “too big” or no longer “new.” These are arguments often posed by investors when explaining why Constellation Software (TSX:CSU) isn’t worth their capital. However, they couldn’t be more wrong.
Yes, smaller companies should be able to grow at faster rates. However, at a market cap of $35 billion, Constellation Software is still much smaller than some of the high-performing growth stocks. The company is a proven winner and has been able to produce an average annual return of 39% since 2007. This outperforms the TSX by nearly 38% on an annual basis and would have turned a $10,000 investment into $800,000.
These three companies may not be the flashiest of names at the moment, but they are all proven winners. Shopify, Brookfield Renewable, and Constellation Software have a history of market outperformance, and all signs indicate that pattern should continue. An investment in these three companies in 2021 will certainly make you rich in the coming years.
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Fool contributor Jed Lloren owns shares of Brookfield Renewable Partners and Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Constellation Software, Shopify, and Shopify.