While we aren't counting on Shopify to do as well as it did last year, these monster rallies have what it takes to keep rewarding shareholders for extended periods.
Just look at our top pick in 2019: Apple (AAPL) blew everything else away and then did a literal victory lap in 2020. We loved the stock four years ago at $72.
Now that electronic commerce is shifting into racing gear, the rest of the world is figuring out that Shopify is the Amazon (AMZN) of the future at 1/10 the market cap.
Turning to our new Top Picks, the archetypal "work from home" miracle stock — Zoom Video Communications (ZM) — surged from $75 to $560 once it became clear that the pandemic would force millions of people to find new ways to hold meetings when the offices were shut down.
Now that the initial froth has receded, it's time for ZM to really get to work. Video meetings are not going away. They were already becoming prevalent before the pandemic and all the lockdowns did was accelerate adoption.
The latest figures we've seen have 300 million people in Zoom meetings every day. And since enterprise users sign up for full-year subscriptions, that vast audience is now largely locked in for months to come.
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Not everyone is going back to the office. Revenue doubled in 2018 and 2019, taking the company to profitability while conserving $1.9 billion in cash.
This is the Word or PowerPoint for a new generation. We wouldn't be surprised to see Microsoft (MSFT) buy Zoom out to incorporate it into the Office suite, but we're more eager to see where the stock can go on its own.
Our top conservative investment for the new year is New Residential Investment Corp. (NRZ). I chose this stock purely because it has so much potential and is so deeply discounted now.
CEO Michael Nierenberg insists that book value on the company's mortgage portfolio is at least $16 per share and could easily hit $19 under the right conditions. Here below $10, you're getting those assets along with the operating cash flow stream for free.
Cash flow remains strong enough under current market conditions for the quarterly dividend to rebound to $0.20 per share. The worst is over and we expect additional payout hikes as the credit markets continue to heal.
By the end of the year, someone who establishes an NRZ position at $10 could be earning a 15% yield in perpetuity. Even now, 8% is worth locking in. We could talk about this company forever.