3 Unstoppable Actions That Can Turn $300,000 Into $1 Million By 2026
Over the past three and a half months, Wall Street and investors have been given a not-so-subtle reminder that stocks can go down as easily as they can go up. Since the start of the year, both the offshore S&P500 and 125 years Dow Jones Industrial Average entered official corrective territory with declines of at least 10%. The tech-heavy Nasdaq Compound did even worse, with a peak drop between mid-November and mid-March of 22%.
While steep market declines can sometimes be scary due to the rapid bearish moves and emotions that can accompany large index swings, they are historically the best time to put your money to work. While we don’t know in advance when the corrections will occur, how long they will last, or how deep the decline will be, we do know that every notable correction in history has ultimately been erased by a bullish rally. In other words, buying high quality stocks and being patient is a proven formula for making money.
After major pullbacks in all major indexes, three unstoppable stocks stand out as serious wealth creators. If you were to invest $300,000 in these stocks right now and allow your investment thesis to materialize over the next four plus years, these companies have the potential to make you a millionaire by 2026.
The first unstoppable stock that has all the catalysts and intangibles needed to grow an initial investment from $300,000 to $1 million by 2026 is the electric vehicle (EV) maker Nio ( NI -1.77% ).
Like most auto stocks in recent months, Nio has slipped. Worries over auto loans in a rising rate environment, coupled with supply shortages of semiconductor chips, weighed on the industry. But given Nio’s innovation and the gigantic opportunity at its doorstep, this setback is nothing more than a gift to patient investors.
Although estimates vary wildly, most industry executives believe around half of global auto sales will be electric vehicles by 2030, according to a survey conducted late last year. by the consulting firm KPMG. This aligns with most major economies wanting to reduce their carbon footprint and halt/mitigate the impact of climate change. This surge of green energy is what should enable a decades-long vehicle replacement cycle to take shape.
What will make Nio stand out among a growing sea of startup EV makers and legacy auto stocks is its innovation. A perfect example would be the launch of the ET7 and ET5 sedans this year. The full-size ET7 and mid-size ET5 both have battery upgrade options that can increase their range to around 621 miles. These two electric vehicles are direct competitors of You’re here in China, but can blast Tesla’s flagship EVs out of water (with a battery upgrade).
Beyond just introducing new vehicles, Nio rolled out its battery-as-a-service (BaaS) subscription in August 2020. With BaaS, buyers get a discount off the original purchase price of their vehicle and have the ability to recharge, swap and upgrade their batteries. For Nio, BaaS drives long-term recurring revenue and builds first-time buyer loyalty to the brand.
There are also plenty of reasons to be encouraged by Nio’s shipment growth. Even in the face of tough supply chain issues, the company delivered nearly 25,800 EVs in Q1 2022. Compare that to less than 4,000 EVs delivered in Q1 2020 to see how far the company has come. business in just 24 months.
With sales surging like wildfire and Wall Street pricing in a shift to recurring profitability in 2023, Nio’s recent pullback is the perfect time to step on the gas.
Another unstoppable stock with all the tools to increase in value 233% over the next four years and change is a furniture company Lovebag ( LOVE -1.07% ).
Normally, just saying the phrase “furniture company” is enough to put someone to sleep. Most furniture companies are slow-growing, brick-and-mortar based businesses that rely on many of the same wholesale furniture manufacturers. But Lovesac has completely disrupted this industry with its furniture and omnichannel sales approach.
While Lovesac was initially known for its pouf-style chairs (“bags”), nearly 88% of its net sales in fiscal 2022 came from sactionals. A “sactional” is a modular sofa that can be rearranged dozens of ways to fit virtually any living space. These sofas can come with a number of upgrade options, including wireless charging and built-in premium speakers.
Beyond just being functional, there are over 200 different cover choices. This means it will match any theme or color scheme of a home. And best of all, the yarn used in these covers is made entirely from recycled plastic water bottles. With older millennials as its main customer, Lovesac promoted its eco-friendly furniture as a major selling point.
Along with its functionality, choice and ESG links, Lovesac’s innovation is on full display with its nimble omnichannel sales platform. While most brick-and-mortar furniture retailers struggled during the pandemic, Lovesac thrived as it was able to shift almost half of its sales online. Although the company has 146 outlets in 39 states, it also relies on boutique-to-boutique partnerships and pop-up showrooms. Ultimately, we’re talking about a business with significantly lower overhead costs than a traditional furniture retailer.
Lovesac hit recurring profitability two years ahead of Wall Street forecasts and should have no trouble sustaining a 20% (or more) growth rate for the foreseeable future. That makes it a good bet to more than triple by 2026.
A third and final unstoppable action that can generate massive gains for investors and turn a $300,000 investment into $1,000,000 by 2026 is a dog-focused products and services company. Bark ( BARK -1.70% ).
Bark is one of dozens of companies that got their start through a Special Purpose Acquisition Company (SPAC). Most of the companies that entered the market via SPACs were crushed, with Wall Street and investors paying particular attention to stocks with premium valuations. However, in Bark’s case, this beating provided the perfect entry point for patient investors.
First, it’s important to note how beastly the pet industry has become. Last year, the American Pet Products Association estimated that American owners spent nearly $110 billion on their furry, gilled, feathered and scaly family members. It’s been more than a quarter century since year-over-year spending on pets has declined in the United States
America’s love for pets (especially dogs) is evident in Bark’s operating results. The company’s active subscribers grew to 2.3 million at the end of 2021, with average order value hitting an all-time high of $31.10.
These numbers touch on Bark’s biggest advantage: its subscription-based operating model. Even though Bark products can be found in tens of thousands of store doors, including walmart, 84% of the company’s net sales in the third fiscal quarter were of the direct-to-consumer variety. The overhead of a subscription-based business is significantly lower than that of traditional pet stores. As a result, Bark’s gross margin has always been between 55% and 60%.
Additionally, Bark is counting on new products and services to drive subscription growth and add-on sales. For example, he introduced Bark Eats during the pandemic. This service will work with owners to customize a dry food diet for their pooch. For what it’s worth, Bark notes that cross-selling and upselling revenue jumped 84% in the fiscal third quarter compared to the year-ago period.
Although Bark is losing money right now, his rapid growth in a virtually recession-proof industry cannot be ignored. Look for Bark to more than triple patient investor money by 2026.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging 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 wealthier.