One of the craziest years on record for the stock market will come to an end in just five days. However, not all investors are thrilled to be putting 2020 in the rearview mirror.
Cryptocurrency investors reemerged from shadows in March, and bitcoin has been virtually unstoppable ever since. As of the very early morning of Dec. 23, the world’s largest cryptocurrency was up nearly 233% on a year-to-date basis.
While there’s no one specific factor driving bitcoin higher, it’s looks to be some combination of a falling U.S. dollar, greater acceptance by merchants, and the ongoing move away from cash during the coronavirus pandemic.
But 2021 could bring about change. It’s my belief that bitcoin will take a back seat in the returns department to the following trio of high-powered growth stocks next year.
Singapore-based Sea Limited (NYSE:SE) is one company that could crush bitcoin in 2021. Despite its shares quintupling in value over the past year, Sea’s operating results show it’s just getting started.
Sea brings together three exceptionally fast-growing businesses under one umbrella. First up is the company’s digital entertainment segment, which is responsible for the lion’s share of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Sea ended September with close to 573 million active gaming users, 65.3 million of which are paying customers. For some context, the number of paying users is up 124% from the prior-year quarter.
Yet what’s really creating a lot of buzz is Sea’s online shopping platform, Shopee. During the third quarter, gross orders catapulted 131% higher from the year-ago period, with gross merchandise value effectively doubling to $9.3 billion. For the moment, Sea’s e-commerce segment is a money-loser. However, it’s incented to invest heavily in an operating model that has sustainable high double-digit — or even triple-digit — annual sales growth potential.
Third, Sea has its nascent but growing digital financial services segment. The company’s mobile wallet payment volume surpassed $2.1 billion during the recent quarter, with the number of paying customers increasing to 17.8 million. Considering that Southeastern Asia is a largely underbanked region of the world, mobile wallets could be a surprisingly strong growth driver for the company.
The upcoming year could be especially fruitful for U.S. marijuana stocks. Though rumors persist about a possible federal legalization with President-elect Joe Biden in the White House, I believe state-level legalizations and organic growth within legalized states provide more than enough opportunity for high-powered growth stocks like small-cap Jushi Holdings (OTC:JUSHF) to shine.
Arguably the biggest differentiator between most vertically integrated multistate operators and Jushi is the company’s focus on the limited license legalized states of Pennsylvania,…