Owning powerhouse stocks can add significant value to your portfolio. Megatrends are those that are shaping or will shape society in significant ways. Think AI, EVs, renewable energy, biotech, and more.
Megatrend stocks are often large, established companies that are capable of sequestering a large market share for its own ends. Often, these stocks are also leaders in their fields with enough resources to ride out the trend to its eventual completion or evolution.
Investors can hold these companies as part of a buy and hold strategy or a shorter term positional trade. Positional traders aim to maximize capital appreciation by riding out the trend until its end. So, it’s more long term than swing trading. The benefit of positional trading over buy and hold is that active traders get to minimize their opportunity costs of lost appreciation. Also, they ensure effective risk management by selling their positions high and buying low into new prospective trends.
So, let’s delve into three of the best megatrend stocks for investors to consider buying, due to their competitive industry positions and attractive growth prospects.
Enphase Energy (ENPH)
Enphase Energy (NASDAQ:ENPH) is a leading company in the solar energy sector. In conjunction with wind, hydroelectric, and possibly nuclear, solar energy will contribute to a significant proportion of the world’s energy needs. This makes companies like ENPH an indispensable megatrend stock.
Good reasons exist for investors to be bullish on ENPH stock. The company’s share surged over 30% in December last year, and it’s presently far below its all-time high.
Recently, ENPH has caught the attention of some Wall Street analysts, which suggests that it may also be an undervalued pick for investors to consider.
Tesla (NASDAQ:TSLA) is both a leader in EVs and the energy storage and clean energy markets.
Further, TSLA is one of those marquee names that could unlock significant value in investors’ portfolios if certain conditions align.
Despite being up nearly 90% over the past year, it has dipped slightly over the past month. But, optimism is on the horizon. For starters, TSLA’s revenue has grown significantly over the past decade. In fact, projections call for $92 billion this fiscal year, up from $1.7 billion. This growth represents a compound annual rate of almost 50%.
Finally, TSLA is trading at a discount to both its forward earnings and forward sales, which means it could be relatively undervalued based on these measures.
Moderna (NASDAQ:MRNA) is a healthcare megatrend stock that’s making big waves. Its potential extends beyond vaccines into other therapeutic areas. However, its prominence was perhaps most observed during the COVID-19 pandemic.
MRNA’s pipeline includes the development of a respiratory syncytial virus (RSV) vaccine. And, Federal Drug Administration (FDA) approval may be coming within the approaching months. Further developments include Moderna’s possible cancer vaccine. This inoculation would be highly beneficial to melanoma patients to prevent premature death.
Moderna’s sales are expected to remain robust, with projections of $4 billion in sales for 2024 and a forecast for a return to growth. In fact, this may position it ahead of some peers like Pfizer (NYSE:PFE), regarding its valuation as well as long-term growth outlook.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.