When it comes to investing, by looking back at history, investors should be able to see that patience pays off. Whether it’s oil and gas, banking, gold, or housing, everything eventually makes a comeback. That’s why investing in stocks over the long term is one of the top strategies we recommend here at the Motley Fool. Even if you take into account Black Monday in 1987, the Great Recession, the dot-com bubble, and the SARS and COVID-19 crashes, the TSX has still delivered over 1,000% since 1980!
Yet even with 1,000% growth, this is nothing when looking at the jump in share price of some stocks today. Let’s look at BlackBerry (TSX:BB)(NYSE:BB) for example. In the last month alone, shares have climbed 85%! In the last year, shares increased 146%. And since it came on the market, it’s beaten out the TSX to rise 1,086% in just two decades.
However, I wouldn’t be so quick to continue investing in the “pump-and-dump” stock.
BlackBerry stock driven by hype, not data
Earlier this month, BlackBerry stock rose dramatically, as retail traders began to purchase shares in bulk. This was fuelled mainly by interest on the social news aggregate site Reddit. Shares of BlackBerry stock rose by 85% in a month, as I mentioned, but those share increases are likely to be short lived.
Although BlackBerry stock has seen some incredible gains, it’s mainly driven by hype, momentum, and, frankly, ignorance of the actual fundamentals of this company. In other words, BlackBerry stock is a bubble that will soon burst.
Investors may cite the innovation taken on by BlackBerry stock, and it’s true! The company is a leader in cybersecurity and cloud-based protection specifically for smart driving cars. But if you do more research, you’ll find BlackBerry stock is far from alone. Many FAANG companies have entered the smart driving space, along with cybersecurity, and with far more cash at their disposal. BlackBerry stock may eventually not keep up.
But if a stock can swing so dramatically with no real news behind it, it’s probably not something you want to be a part of. Instead, consider these stocks before the BlackBerry stock bubble bursts.
Well Health stock
Before considering BlackBerry stock, look into Well Health Technologies (TSX:WELL). This company has seen almost 200% growth in the last year alone and is still a solid buy today.
Well Health stock obviously grew during the coronavirus pandemic. Keeping risks to a minimum while still seeing patients was a priority, but then the company expanded further. It now has multiple medical care clinics at its disposal, from physicians to physio. The company is now officially the largest outpatient medical clinic in the country.
But it’s not stopping there. Well Health stock has been on an acquisition spree, using its record-setting revenue to buy companies in the United States as well. That hasn’t even been factored into the revenue recently reported; it skyrocketed by 150% year over year.
The pandemic will end, but this company is likely to continue growing, considering it’s unlikely we will return to pre-pandemic norms. This method provides patient care in a fast, safe, and affordable way for physicians and patients. I’d much rather discuss my ailments with a doctor without driving 20 minutes to see her! This alone could make it the fastest-growing healthcare stock of the decade, far outpacing BlackBerry stock.
It’s not just healthcare that I would look at. E-commerce solutions also grew during this year, yet today’s pullback is still upon us. One company that isn’t offering much more opportunity to get in cheap is Lightspeed POS (TSX:LSPD)(NYSE:LSPD).
Lightspeed stock has been on a spending spree, picking up two companies this week for US$975 billion! That puts the total spent on acquisitions since January 2020 up to just shy of US$2.3 billion! The goal is for management to provide the easiest solutions for merchants to reach suppliers and customers. And these acquisitions have locked in this strategy for the next five years or more.
These acquisitions will take a while to get into the pipeline, so revenue won’t be reported until likely the end of 2021 or even 2022, since they close in September. But with shares rising 160% in the last year, despite the post-pandemic challenges, Lightspeed stock is definitely on the path to profitability before BlackBerry stock.