Sabtu, 01 Mei 2021

Must Read: My Pick for the Cryptocurrency Market (And it’s Not Even Crypto)

As you probably already know, the crypto market has been on fire in 2021.
Louis Navelliers Market 360

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My Pick for the Cryptocurrency Market (And it’s Not Even Crypto)

Louis Navellier
Louis Navellier

As you probably already know, the crypto market has been on fire in 2021. This week alone, Dogecoin surged over 20% on largely due to Tesla CEO Elon Musk and Mark Cuban tweeted about the popular cryptocurrency. It wasn’t the first time Musk Tweeted about Dogecoin either, though he’s admitted he sees it more as a joke.

In addition to Dogecoin, Ethereum, the world’s second-largest cryptocurrency in terms of market cap, hit a new high this Thursday. Bitcoin is also approaching a new all-time high this week after hitting a new all-time high just earlier this month.

As you can see, cryptocurrency is seemingly everywhere you look. Now, before I get ahead of myself, I’m not going to say you should run out and buy crypto. Personally, I find cryptocurrency too volatile. However, there is a way to play it with a fundamentally superior stock without  taking on the risks and volatility associated with investing directly in crypto or crypto derivatives.

I’m talking about PayPal Holdings (PYPL).

PayPal is a financial technology company that was spun off of eBay in 2015 and allows users to make purchases from online vendors with ease. The company is also a major player in peer-to-peer payments through Venmo. As of the end of 2020, Venmo had 65 Million users!

Now, PayPal is ramping up its exposure to crypto assets. PayPal allows users to buy and sell crypto straight from their app and also allows customers to use crypto to buy products from millions of vendors.

This is a feature that is not available through the elephant of the crypto trading space, Coinbase Global, Inc. (COIN). Coinbase went public on April 14 at a nearly $100 billion valuation. Both companies generate revenues from crypto transactions, but PayPal collects a 1.5% to 2.3% transaction fee when customers buy and sell crypto.

While this is a small fraction of PayPal’s current revenue stream, continued adoption of crypto should drive significant growth. Coinbase, on the other hand, generates almost all of its revenues through crypto trading fees and is thus far more susceptible to swings in crypto prices and activity.

Last year, Coinbase generated about $1.3 billion in sales and $108 million in net income. To put that in perspective, PayPal had over $21 billion in sales and $4.2 billion in net income last year.

With almost 20 times more sales and 40 times more profits it is truly baffling that PayPal only trades at five times the valuation on Coinbase. Coinbase grew sales 140% from 2019 to 2020 and PayPal grew sales 22% over the same time period. While Coinbase is growing faster, they have a long way to go and a lot of potential competition to beat out before they come anywhere close to the numbers consistently posted by PayPal.

Speaking of numbers, PayPal is set to report first-quarter earnings next Wednesday, May 5. The company is expected to post earnings per share  of $1.01, which is a 5# year-over-year increase. Revenue is expected to come in at $5.9 billion, which is up 27.7% from the same quarter a year ago.

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Furthermore, PayPal has posted year-over-year sales growth every single quarter since it was spun off of eBay in 2015. That growth accelerated from the mid-teens to over 20% annual growth each of the last three quarters thanks to sped up adoption of e-commerce triggered by COVID-19.

I expect this new growth standard to persist well into the future as the company turns to crypto for its next level of growth. It is this proven track record and a far more reasonable valuation that make PayPal a much safer way to play crypto. PayPal currently has a B grade (Buy) on Portfolio Grader.

The bottom line is PYPL is the best “picks and shovels” play in the cryptocurrency market.

If you’re looking for other stocks to invest in, then look no further than my Growth Investor Buy List, which is chock full of high-quality stocks dominating their respective industries. This is important, especially now that the first-quarter earnings season is now in full swing.

According to FactSet, 25% of the S&P 500 companies have released results from the most-recent quarter, and 84% of these companies have exceeded analysts’ earnings expectations. If earnings stay on this track, it could be the highest percentage of S&P 500 companies reporting a positive earnings surprises since 2008, when FactSet began tracking the metric!

I expect companies that post strong earnings and positive guidance will emerge as the market leaders. This fits my Growth Investor stocks to the “T,” as out average stock is characterized by 62.2% annual sales growth and 257.7% annual earnings growth.

In the past three months, my average Growth Investor stock had its consensus earnings estimate revised 31.2% higher. Naturally, these positive earnings revisions are expected to precede massive first quarter earnings surprises.

If you’re interested in my Growth Investor service, now is the perfect time to join. I just released my Growth Investor May Monthly Issue yesterday with seven new buys, my latest Top 5 Stocks list, earnings reviews and earnings previews for the 19 Growth Investor stocks that report next week.

There will be a lot to talk about, so click here now to get started!

Sincerely,

Signed:
Louis Navellier

P.S. There’s a great divide opening up in America, and investing in my Growth Investor stocks will help get you on the right side of it. You see, on one side is a new aristocracy that’s amassing more wealth, more quickly than any other group in American history. For people like me, the one percent, life has never been better, more prosperous.

On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate.

What’s happening is only going to gather in strength over the coming decades. It certainly won’t weaken.

Few Americans even know that any of this is going on. I’ve never seen anyone from my side of the chasm step forward to explain any of these things.

It’s why I put together this video. In it, I’ll lay out exactly what is happening, including several key steps every American should take right now.

It doesn’t matter if you have $500 in savings or $5 million. You can benefit from the information in this video.

It’s free to watch and by doing so I know you’ll be ahead of everyone else struggling to understand what is really going on.

Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owned the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

PayPal Holdings, Inc. (PYPL)

 

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