It takes time to develop the right investment habits and develop an eye for good assets, no matter what domain you are sticking to. But it takes an even longer time to break your old habits or keep them from influencing your investment approach when you are looking into a different asset class.
And that’s a shortcoming that makes several good stock investors bad crypto investors. Even though they understand that it’s an entirely different asset class and the crypto market has little to no overlap with the stock market in terms of patterns and movements, devising and implementing a unique asset-centric investment approach for seasoned stock investors proves difficult.
As a value investor, you might be very interested in Bitcoin right now because it’s trading at a discount compared to its recent peak. But you might have trouble determining whether it has reached rock bottom or will it sink further to a four-digit price tag. A safer approach would be to not risk tying your capital to an asset that you don’t fully understand and buy a stock that might have amazing long-term potential.
A payment technology company
Nuvei (TSX:NVEI) is a relatively new kid on the block. The company had the largest tech IPO in the tech sector (beating several other technology stocks by a significant margin) and raised $805 million in 2020. It has been less than a year since then, and the stock has only grown since then (about 119%), indicating that the interest is still strong in this tech company. Right now, it has a market capitalization of $14.1 billion and minimal debt.
Even though the company is quite expensive right now, the higher price tag is justified since it didn’t just have a ground-breaking entry in the market; it has steadily built up upon that. The stock didn’t spike the way other tech stocks did in the aftermath of the pandemic-driven crash, and it’s one of the reasons it wasn’t subjected to a correction like many others in the sector.
The revenues are also consistently growing, and the gross profit is in line, so the stock growth is not detached from the real numbers underneath the hood. The company is solid, but will it stay this reliable growth stock for the coming decade or so?
Nuvei has an impressive presence. It has already entered 200+ global markets, works with 470 different payment methods, and offers payment solutions not just for 150 fiat currencies but 40 cryptocurrencies as well, and that’s what promises a promising future for the company.
The concept of using cryptocurrencies for routine payments is still in its infancy and will go through a lot of regulatory and adoption phases before it becomes commonplace. But when it does, companies like Nuvei, which already have the protocols, technology, and SOPs for it and have a global presence, might be ideally placed to profit from this transformation and get the early bird advantage.
Nuvei has already proven its mettle as a one-stop payment solution for a wide variety of businesses and financial transactions, and it’s equipped to embrace cryptocurrency-based payments as soon as they pass through legal barriers. It has the tech and presence to compete with much more prominent names in the industry. All in all, the company has a lot of long-term upsides.
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.
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.