When looking for stocks to invest in, retail investors often want to find companies that have had strong stock performances in the past, but not so strong that they feel like they’ve “missed” their chance. This is the wrong way to go about it. In fact, if you find a company that has gained more than 100% over a certain period, it’s a good idea to jump into the company, assuming its business is still operating at a high level. In this article, I will discuss two stocks that could post massive returns in the future, even though investors have already been generously rewarded.
Start with this top stock
Shopify (TSX:SHOP)(NYSE:SHOP) stock has been a very impressive performer over the past six years. In fact, since its IPO in May 2015, Shopify stock has managed to gain nearly 5,700%. That represents an average annual gain of 94%. To put this into perspective, the TSX has gained an average of 6% per year over the same period. Because of this massive gain, investors are very hesitant to start or add to positions in this company. However, Shopify has really only started to show what it’s capable of.
Shopify believes that the small- and medium-sized business market that it serves has a size of $153 billion. This doesn’t even consider the potential revenue that Shopify can capture in its entrepreneur and large company segments. For example, Netflix, one of the largest brands in the world, has only recently started to use Shopify’s platform. As more businesses turn to Shopify to operate their online stores, investors should see continued returns.
After a tough start to the year, Shopify stock has rallied more than 50% in just under two months. This gives the stock a gain of about 37% year to date. Shopify stock has certainly been an impressive performer since 2015, but this is just the beginning.
This stock was hot coming out of the gate
When Nuvei (TSX:NVEI) finished its first day of trading, the company had already made history. It now holds the record for the largest Canadian tech IPO of all time. Since then, Nuvei has continued to reward shareholders. In a year where most high-growth tech companies have struggled, Nuvei never really saw a significant downturn. There was a one-month span where Nuvei stock decreased about 24%, but it recovered very quickly. Today, the stock is up nearly 46% year to date. Since its IPO in September 2020, Nuvei stock has gained nearly 128%.
Nuvei provides an omnichannel payment platform to businesses. The company currently serves customers in more than 200 global markets, accepting 450 payment methods and 150 currencies. In March, the company announced that it had added a payment solution for nearly 40 cryptocurrencies onto its platform. Nuvei is dedicated to continued innovation within the fintech space. With that mindset in place, investors could be in position to see massive returns in the coming years.
A massive winner in 2020
When the COVID-19 pandemic shook the world, investors were quick to turn to Docebo (TSX:DCBO)(NASDAQ:DCBO). The company offers a cloud-based, AI-powered eLearning platform to enterprises. From that description, it’s clear why Docebo stock seemed like a no-brainer once governments started imposing business lockdowns around the world. Using its platform, training managers can assign, monitor, and modify training exercises more easily.
Since its IPO in October 2019, Docebo stock has gained a staggering 486%. This represents an average annual return of 151%. Over the same period, the TSX has gained an average of 13% per year. However, this year has been a different story. Docebo stock fell as much as 40% since the start of the year. But the company has started to turn it around.
Over the past three months, Docebo stock has gained 61%, bringing its year-to-date performance back to even. The company has continued to execute, and the stock has shown a quick recovery. This is one company that could be massive in a few years.
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 Jed Lloren owns shares of Docebo Inc. and Shopify. The Motley Fool owns shares of and recommends Docebo Inc., Netflix, and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.