WELL Health Technologies (TSX:WELL) has been one of the best-performing tech investments of the past decade. If you’d bought WELL Health stock in 2016, you’d be up 7,236% by now. In my view, it’s still got plenty of room to run. However, future gains may not be as impressive as its previous performance.
This is why investors need to look for the next WELL health stock. Here’s a closer look at some intriguing opportunities.
What drives WELL Health stock?
Understanding WELL Health stock’s key drivers is critical. Much of the company’s growth was driven by acquisitions over the past decade. The company managed to raise tremendous capital from legendary investors such as Sir Li Ka-Shing. This capital was combined with cheap debt to acquire niche startups and emerging enterprises in a field that was rapidly expanding.
WELL Health’s consolidation strategy in the multi-trillion-dollar healthcare market was the key reason for its growth. This means the next big thing will probably have a similar business model.
Topicus (TSXV:TOI) is the perfect example. This relatively unknown tech stock was spun off from Constellation Software — Canada’s most successful tech conglomerate. Just like its parent company, Topicus is focused on acquiring and integrating specialized enterprise software providers. The difference is that their targets are all based in Europe.
European tech startups have the right talent but not the same access to capital as their American counterparts. Investors on the continent are much more risk averse, which creates an opportunity for Topicus to sweep in and acquire software developers at cheaper valuations.
The company is currently worth $3.3 billion. It could soon be worth much more, as it consolidates Europe’s trillion-dollar enterprise software opportunity.
The global digital payments market is absolutely immense. Sales of virtual and digital goods are just getting started. Meanwhile, physical stores have yet to adopt digital payment portals in much of the world. That creates an opportunity for Lightspeed to expand into.
The company has been growing organically at a steady pace, but it’s also acquiring companies to expand its horizons. Over the years, Lightspeed has made 13 acquisitions, including UpServe, ShopKeep and Vend. Many of these, such as Ecwid, have helped the company gain a stronger grip on the e-commerce sector.
Lightspeed’s most recent acquisition, NuORDER, is a young startup trying to disrupt the business-to-business e-commerce segment.
These strategic moves expand the company’s total addressable market far into the multi-trillion-dollar global retail sector. Lightspeed is an ideal growth stock for long-term investors.
WELL Health stock has delivered stellar returns by acquiring its way to dominance in a massive industry. Lightspeed POS and Topicus could do something similar in the equally massive retail and enterprise software sectors.
Keep an eye on these growth stocks.
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.
The Motley Fool owns shares of and recommends Constellation Software, Lightspeed POS Inc, and Topicus.Com Inc. Fool contributor Vishesh Raisinghani owns shares of WELL Health Technologies and Topicus.Com Inc.