Netflix shares won the decade. Here are some guesses at what could be the top stock of the 2020s – CNBC
Posted: December 27, 2019 at 1:46 pm
Netflix CEO Reed Hastings gives a keynote address, January 6, 2016 at the CES 2016 Consumer Electronics Show in Las Vegas, Nevada.
Robyn Beck | AFP | Getty Images
As 2010 began, Netflix was a nascent challenger to the sprawling media industry, worth less than $8 a share.
Fast forward 10 years and a stock gain of more than 4,200% and Netflix is now a technology giant mentioned in the same breath as the likes of Apple and Facebook, with dozens of Wall Street analysts recommending Netflix shares to investors.
But a new decade has come. Are there any stocks with the potential for those kinds of gains in the next 10 years?
Finding stocks with this kind of potential is a difficult and risky task. Dozens of public companies could be crowned the high-growth disruptor of the next decade. In order to find some potential winners, CNBC analyzed megatrends just emerging similar to streaming a decade ago, and found companies whose fortunes are tied to those big changes.
The following seven companies appear ripe to surpass investor expectations, each in a different category: energy innovation, big data explosion, autonomy, travel, aging, agriculture and entertainment.
However, as UBS noted earlier this year, it is "important to differentiate between trends and fads," and that's what can make this so difficult. The firm advised investors to ground their strategies in three reliable long-term trends: population growth ("by 2050, the global population is expected to reach 10 billion, up from 7.5 billion today"), aging ("the population is getting older and living longer") and urbanization ("by 2050, it is expected that 68% of the world's population will reside in cities").
"From an investment perspective, we are focused on the problem-solving companies that are meeting the needs of a changing world," UBS said.
With that warning in mind, here are the stocks with the ambition of revolutionizing whole industries.
The shift to clean energy is no longer about if, it's when.
"We expect the drive towards cleaner energy to continue, as cleaner power generation is increasingly competitive versus traditional fossil-fuel-based technologies," Credit Suisse said in a January note.
The firm recently called out NextEra Energy, with its "world-leading large-scale renewable development business," as a top pick in the energy sector.
"Investors are more focused than ever on global warming's impact on the economy, society, unemployment and migration," Bank of America said in November, a change to which clean energy companies stand to benefit.
Coal, oil and gas may not be going away tomorrow, but Credit Suisse thinks the change in energy's economics is increasing alternative sources, which is where NextEra Energy comes in.
"Nearly half the company's assets and earnings originate from its market leading dominance in North American utility scale renewable power. We expect this segment to grow at least 15% for the next decade or longer," Credit Suisse said.
Additionally, the firm highlighted the "deep management bench" of NextEra Energy and a confidence in the company's "consistent investor friendly execution for the next decade or longer."
There's quite a long way to go before humans are fully replaced at the wheel of automobiles but Barclays sees an interim "multi-modal" beginning to further evolve transportation in cities across America.
Barclays said in June that it estimates "robotaxis can address a portion but not yet all of urban and suburban trips," replacing as many as 42 million vehicles in the U.S.
"Cutting the car ownership cord can open up dramatic growth in terms of VMT (vehicle miles traveled) for alternative mobility," Barclays said.
Ride-hailing company Lyft, which had its IPO in March, has several notable partnerships. Lyft is working with two driverless vehicle developers: Alphabet-owned Waymo and Irish company Aptiv. The former is deploying 10 vehicles in Phoenix on Lyft's network and the latter plans to test in Las Vegas. Additionally, Lyft partnered with Ford, which plans to launch a commercial autonomous vehicle with Lyft in 2021. Lyft is also working with autonomous vehicle software developer Magna.
Barclays noted that households with two or more cars are likely to be the first to look to mobility-as-a-service ("MaaS") alternatives, possibly benefiting Lyft.
"We see anyone driving less than 200-300 miles/month at risk of switching from ownership to MaaS," Barclays said.
Creative pricing structures could also be a boon to ride-hailing companies like Lyft, according to the firm.
"Subscription packages would likely encourage loyalty to ride-hail companies and also reduce cost/mile or monthly mobility payments to levels more attractive to current car owners," Barclays said.
Barclays also noted the evolving views of car ownership, especially on a regulatory basis.
"Local, regional and national policymakers globally are showing more appetite for discouraging car usage entirely in urban areas," the firm said. "Scandinavian countries show fewer cars/household than elsewhere in Europe highlighting that consumers do give up car ownership when governments start to actively discourage car usage and encourage alternative forms of mobility."
The world's biggest superpowers are in fierce pursuit of the next generation of technologies, all while demand for data continues to skyrocket.
"US and China [are] competing in nextgen technologies like quantum computing, semiconductors, AI, 5G communication networks, cybersecurity and space that go well beyond manufacturing and trade issues," Bank of America said in November.
A seemingly endless list of companies could be named from the subsectors of technology. But Broadcom, a company with a wide range of hardware and software products, was highlighted by Credit Suisse as a high-quality player in serving demand for internet of things ("IoT") and building 5G-capable devices.
"Over the next few years, the number of global connected devices is expected to grow exponentially, according to our technology analysts," Credit Suisse said.
5G is expected to drive growth, and Broadcom, especially through recent acquisitions, has been positioning itself to be a key manufacturer serving new devices and software.
While Sir Richard Branson's company has been focused on flying tourists to space for the past decade, Virgin Galactic recently has been talking to investors about the potential of high-speed, long distance travel, also known as point-to-point space travel. Virgin Galactic recently received investment from Boeing's venture arm HorizonX to explore developing a vehicle capable of flying around the world at high speeds.
Of the companies on this list, Virgin Galactic has the clearest risk: Flying people on rockets to space means the potential for a fatal accident. But three Wall Street firms Morgan Stanley, Credit Suisse and Vertical Research Partners have begun covering Virgin Galactic's stock since it began trading in October and all three have buy ratings and bullish forecasts.
Morgan Stanley has especially highlighted Virgin Galactic's long-term plan, which is to apply what it's learning from flying tourists to develop the capability of flying passengers from one place in the world to another. If successful, Virgin Galactic would challenge the airlines. Morgan Stanley forecast $800 billion in annual sales for hypersonic travel by 2040.
"A viable space tourism business is what you pay for today but a chance to disrupt the multi-trillion-dollar airline [total addressable market] is what is really likely to drive the upside," Morgan Stanley said.
But Virgin Galactic needs to develop the technology in a reasonable amount of time, according to Credit Suisse, as other companies are working on supersonic or hypersonic vehicles.
"Unless Virgin is able to offer a similarly compelling point-to-point solution, the arrival of point-to-point by competitors could damage the overall [total addressable market] for space tourism and, therefore, the long-term demand profile," Credit Suisse said.
The ever-present quest to extend human life is a marketplace that Bank of America estimated is worth $110 billion today but nearly six times that in five years.
"Genetic therapies represent a paradigm shift in medicine, with the potential to revolutionize healthcare delivery and disrupt the biopharma industry," UBS said in a note this month.
Among the numerous biotechnology companies is Illumina, which is focused on genetic sequencing, a field which Bank of America calls a "moonshot" in the life sciences.
"Illumina has near 100% of revenues from analysing genetic data and would therefore be a High in our universe," Bank of America said in May.
The company's efforts in genetic sequencing range from devices to services. Illumina's products are already used by researchers, which the firm said helps the company "in a broad spectrum of scientific activities to gain a greater understanding of genetic variation and biological function."
"As such, Illumina's tools play an important role in helping advance disease research, drug development, and the creation of molecular tests," Bank of America said.
In the world of food, HSBC this year highlighted several new technologies, like "precision farming" and lab-grown meat, as "transforming the agri-food industry."
"Food preferences are also evolving in developed countries towards organic foods and plant-based diets as consumers are becoming more environmentally minded," HSBC said.
Today's shift is crucial, according to Bank of America, which says the current outlook is bleak, to say the least.
"The current model of food consumption is unsustainable and must change to prevent spiraling societal costs. 1 in 5 world deaths result from poor diets which kill more than tobacco, and health-related costs from red/processed meat consumption total US$285bn annually," the firm said in May.
Bank of America noted that the costs of producing lab-grown meat "have fallen 99.7%" in the past six years, while diets featuring reduced meat consumption simultaneously have increased. That's where Beyond Meat comes in, a company with products in the thick of a sector that's growing fast, according to Piper Jaffray.
"Plant-based US meat retail sales are ~1.5% of the total $80 billion meat category, which is well below plant-based milk's 13% share. A more mature plant-based market conservatively in the 7%-8% range of all meat retail sales would translate to $6-$8 billion by 2025," Piper Jaffray said.
Additionally, Beyond Meat has an even "faster-growing, less discussed" business in food services, UBS said in a note this month. The firm estimates that it's "achievable" for that part of Beyond Meat "to reach $1 billion in food service sales long-term," UBS said.
Put simply, video games have become a behemoth. Not only has it become one of the biggest parts of global entertainment but it continues to be one of the fastest growing, Jefferies told investors in a note this month.
"The industry is currently more than a $150 billion market - larger than digital music and box office combined," Jefferies said.
The firm said Activision Blizzard has built an immense gaming business that's only just beginning to tap into the world of mobile gaming. A Jefferies survey of U.S. smartphone owners found that nearly 90% play mobile games, with about half saying the amount of time they spend playing mobile games increased in the past year.
"We believe ATVI's aggressive approach will continue to pay off, representing a $1 billion opportunity and $0.25 in incremental EPS by 2023," Jefferies said.
But acting as content producer, beyond video games themselves, is where Activision may be able take its next step. Piper Jaffray this month wrote that it expects films and TV series featuring Activision brands will "be featured in various streaming services in coming years." In essence, Activision could evolve from a video game maker to a digital content giant.
Correction: Waymo is an Alphabet subsidiary. An earlier version misstated the relationship.
CNBC's Michael Bloom contributed to this report.
See original here:
- ARMM, state college sign MOA for organic food production in Basilan [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- Global Survey Says We're Eating Better, But Our Diet Is Still Unsustainable [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- The Best Stocks for Organic Food Lovers [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- Organic foods: Are they safer? More nutritious? - Mayo Clinic [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- Organic food - Wikipedia, the free encyclopedia [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- 6 Tips on Raising Organic Kids [Vegan Mofo #26] - Video [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- ABN AMRO and WESSANEN on cash management and organic food - Video [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- Where to Buy Organic Food - Video [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- Online Organic Food India | Buy Sweets Online India - Video [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- Edmonton's Organic Box is set to expand operations to provincially inspected food hub [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- The Truth About Organic Foods - Pros and Cons of Organic ... [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- Organic Foods: Understanding Organic Food Labels, Benefits ... [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- The BEST Hello Fresh coupons and promo codes for Hello Fresh food delivery! - Video [Last Updated On: October 1st, 2014] [Originally Added On: October 1st, 2014]
- Conference brings international organic agriculture leaders together [Last Updated On: October 2nd, 2014] [Originally Added On: October 2nd, 2014]
- Hain Celestial to Gain on Higher Demand for Organic Food - Analyst Blog [Last Updated On: October 2nd, 2014] [Originally Added On: October 2nd, 2014]
- Hello Fresh Deals Boxed Organic Meals Hello Fresh Daily Deals - Video [Last Updated On: October 2nd, 2014] [Originally Added On: October 2nd, 2014]
- Hello Fresh Food Delivery Box Organic Meals Hello Fresh Food Delivery Area - Video [Last Updated On: October 2nd, 2014] [Originally Added On: October 2nd, 2014]
- rise and shine Expo II , organic food - Video [Last Updated On: October 2nd, 2014] [Originally Added On: October 2nd, 2014]
- food 4 life beresfield - Video [Last Updated On: October 2nd, 2014] [Originally Added On: October 2nd, 2014]
- What's In Your Dog's Food? - Video [Last Updated On: October 4th, 2014] [Originally Added On: October 4th, 2014]
- Hello Fresh Discount Boxed Organic Meals Hello Fresh Discount Coupons - Video [Last Updated On: October 4th, 2014] [Originally Added On: October 4th, 2014]
- 7 Surprising Facts About Your Organic Food [Last Updated On: October 5th, 2014] [Originally Added On: October 5th, 2014]
- San Francisco, USA Farmers Market, for All Organic Food Lovers - Video [Last Updated On: October 5th, 2014] [Originally Added On: October 5th, 2014]
- APO E- Learning Course "Organic Food and Certification" in Indonesia - Video [Last Updated On: October 5th, 2014] [Originally Added On: October 5th, 2014]
- Hello Fresh Delivery Locations Boxed Organic Food Hello Fresh Locations - Video [Last Updated On: October 5th, 2014] [Originally Added On: October 5th, 2014]
- Ways to Avoid Cancer #1 "Buy Organic Food" - Video [Last Updated On: October 5th, 2014] [Originally Added On: October 5th, 2014]
- OrganicDataNetwork: Multimedia presentation on Data collection: case study results (Sept 2014) - Video [Last Updated On: October 6th, 2014] [Originally Added On: October 6th, 2014]
- Hain Celestial Riding on Organic Wave: Add HAIN to Portfolio - Analyst Blog [Last Updated On: October 6th, 2014] [Originally Added On: October 6th, 2014]
- Govt wishes to loosen restriction on organic food export [Last Updated On: October 7th, 2014] [Originally Added On: October 7th, 2014]
- Organic Food Commercial - Video [Last Updated On: October 9th, 2014] [Originally Added On: October 9th, 2014]
- Samsung NX3000 Video Test - Video [Last Updated On: October 10th, 2014] [Originally Added On: October 10th, 2014]
- Organic Food: Residues and Contaminants [Last Updated On: October 11th, 2014] [Originally Added On: October 11th, 2014]
- Organic Food | Whole Foods Market [Last Updated On: October 11th, 2014] [Originally Added On: October 11th, 2014]
- Why should we buy organic food - Video [Last Updated On: October 11th, 2014] [Originally Added On: October 11th, 2014]
- Oragnaic Foods: Around Dtown - Video [Last Updated On: October 11th, 2014] [Originally Added On: October 11th, 2014]
- Kids and Organic Food - Video [Last Updated On: October 11th, 2014] [Originally Added On: October 11th, 2014]
- 13 Organic Food Numbers You Need to Know [Last Updated On: October 12th, 2014] [Originally Added On: October 12th, 2014]
- Are Organic Foods Right for You? Understanding the ... [Last Updated On: October 12th, 2014] [Originally Added On: October 12th, 2014]
- 5 Major Myths About Your Organic Food [Last Updated On: October 13th, 2014] [Originally Added On: October 13th, 2014]
- Blue Patch (www.bluepatch.org) Launch at Herne Hill, 28th September 2014 - Video [Last Updated On: October 13th, 2014] [Originally Added On: October 13th, 2014]
- New organic toddler milk from Happy Family [Last Updated On: October 14th, 2014] [Originally Added On: October 14th, 2014]
- South Miami Health Food Store | Beehive Natural Foods | Local Health Food Stores - Video [Last Updated On: October 15th, 2014] [Originally Added On: October 15th, 2014]
- Hannah Crum: Feeding Your Family Organic Food Without Breaking the Budget! On FarOutRadio 8-5-13 - Video [Last Updated On: October 15th, 2014] [Originally Added On: October 15th, 2014]
- ADM to acquire Specialty Commodities for $170m [Last Updated On: October 16th, 2014] [Originally Added On: October 16th, 2014]
- 2014 Lakewinds Organic Field Fund Recipients - Video [Last Updated On: October 17th, 2014] [Originally Added On: October 17th, 2014]
- Organic Food Consumers - JOUR 351 Final Video - Video [Last Updated On: October 17th, 2014] [Originally Added On: October 17th, 2014]
- Organic Food Consumers - JOUR 351 - Video [Last Updated On: October 17th, 2014] [Originally Added On: October 17th, 2014]
- our place and the organic food garden in paradise - Video [Last Updated On: October 17th, 2014] [Originally Added On: October 17th, 2014]
- Organic Food: Pictures, Videos, Breaking News [Last Updated On: October 18th, 2014] [Originally Added On: October 18th, 2014]
- MOST COMPLETE ORGANIC FOOD ON THE PLANET! - Video [Last Updated On: October 19th, 2014] [Originally Added On: October 19th, 2014]
- Fort Lauderdale Organic Food - Video [Last Updated On: October 19th, 2014] [Originally Added On: October 19th, 2014]
- How to understand local consumer demand for natural and organic foods using SimplyMap - Video [Last Updated On: October 19th, 2014] [Originally Added On: October 19th, 2014]
- 5th Negros Island Organic Farmers Festival - Video [Last Updated On: October 20th, 2014] [Originally Added On: October 20th, 2014]
- How to make your own Organic Food Gift baskets - Video [Last Updated On: October 20th, 2014] [Originally Added On: October 20th, 2014]
- Various Health Benefits of Organic Food - Video [Last Updated On: October 20th, 2014] [Originally Added On: October 20th, 2014]
- The Organic Food Bowl - Negros Occidental (Living Asia Channel Documentary) - Video [Last Updated On: October 21st, 2014] [Originally Added On: October 21st, 2014]
- Best Restaurants With Organic Food In The Bay Area [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- Best Restaurants With Organic Food In Pittsburgh [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- Best Restaurants With Organic Food In Minnesota [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- Best Restaurants With Organic Food In Metro Detroit [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- McDonalds May Sell More Organic Foods [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- Best Restaurants With Organic Food In Los Angeles [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- Best Restaurants With Organic Food In Chicago [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- This Is What Happens When You Secretly Feed McDonald's to a Bunch of Health NutsWatch Now! [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- organic food labels - Video [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- WATCH: Food critics tricked into reviewing McDonalds [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- Organic food fad hits Ukrainian consumers [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- McDonalds served as organic food Prank BY: lifehunterstv - REVIEW - Video [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- Organic food 2 - Video [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- Organic food - Video [Last Updated On: October 23rd, 2014] [Originally Added On: October 23rd, 2014]
- Organic food means we're likely to see more Brazilian Wandering spiders in fruit orders [Last Updated On: October 25th, 2014] [Originally Added On: October 25th, 2014]
- Organic Food Snobs Get Pranked With McDonalds and Love It - Video [Last Updated On: October 25th, 2014] [Originally Added On: October 25th, 2014]
- VEGAN FOOD HAUL| ORGANIC STUFF - Video [Last Updated On: October 25th, 2014] [Originally Added On: October 25th, 2014]
- The Green Healthy Organic Food Store - Health Benefits of Eating A Diet of Natural and Organic Foods - Video [Last Updated On: October 27th, 2014] [Originally Added On: October 27th, 2014]
- Pranksters serve McDonald's to organic food experts - Video [Last Updated On: October 27th, 2014] [Originally Added On: October 27th, 2014]
- Organic Food Opinion - Video [Last Updated On: October 27th, 2014] [Originally Added On: October 27th, 2014]
- Where To Shop For Organic Food - Best Deals & Cash Back - Video [Last Updated On: October 27th, 2014] [Originally Added On: October 27th, 2014]
- Eat Healthy, Organic Food on a Budget! - Video [Last Updated On: October 27th, 2014] [Originally Added On: October 27th, 2014]
- Organic certification class offered for North Jersey farmers [Last Updated On: October 27th, 2014] [Originally Added On: October 27th, 2014]
- Organic farming - Wikipedia, the free encyclopedia [Last Updated On: October 27th, 2014] [Originally Added On: October 27th, 2014]