It may be difficult to find big winners at the start of a bull market. Some companies experience strong tailwinds to start an impressive run but end up with a more stagnant stock than would be expected. In order to find companies that have the best chance to outperform in a bull market, investors need to consider its growth trajectory. Companies that operate in emerging industries have the best chance at market-beating gains over the long term. Which two companies should investors own for the new bull market?
This company has exploded into an e-commerce giant
It is no secret that Shopify (TSX:SHOP)(NYSE:SHOP) is my favourite company on the Canadian market. It has gone from an up-and-coming ecommerce enabler to a global behemoth in the industry. Among all other companies that allow merchants to create online shops, Shopify stands out for its impressive growth rate. The company is also the most popular website-builder company in English-speaking countries.
Why invest in Shopify? The company lays out a number of excellent reasons for an investment in the company. First, it has an excellent business model. Shopify provides three different merchant tiers, which offer differing services, respectively. As merchants use Shopify’s platform and become successful, they re-invest into the business, which allows them to keep growing. This benefits everyone involved, from the consumer, the merchants, and Shopify.
It is important to mention that the company also have a lot of advantages over its competitors. Shopify has a vast network of partners. This network of designers, developers, and other partners allows the company to provide services to merchants that its competitors are not able to match.
Further, Shopify aims to optimize its platform using the tens of billions of interactions that have been accumulated over its existence. Using machine learning, the company is able to gather an incredible amount of data.
Online payments solutions will be crucial moving forward
While Shopify allows merchants to sell through online venues, Nuvei (TSX:NVEI) facilitates the payment process for ecommerce and other businesses. Nuvei’s proprietary platform enables businesses to accept in-app, in-store, ecommerce, and mobile payments. As of this writing, Nuvei is exposed to at least 12 different verticals. These include industries such as gambling and sports betting, gaming, online retail, financial services, and marketing.
Founded in 2003, Nuvei has expanded significantly, mainly through acquisitions. Today, the company has a presence in 200 global markets, accepting 450 payment methods in 150 different currencies. Even with its current global presence, Nuvei’s management team intends on seeing organic growth as well. The company intends to fulfill this goal by continuing to invest in innovation, hopefully leading to more and improved product offerings.
Nuvei is a company that I believe can be a very lucrative investment for Canadians. Of course, the company will need to prove its worth in the public markets. However, innovative fintech companies have shown to be very successful investments.
Foolish takeaway
When looking for must-own companies in a new bull market, investors should focus on companies that operate in industries that have strong tailwinds. The e-commerce and online payment industries are two that fit the bill. For this reason, I believe that Shopify and Nuvei are two must-own companies for the new bull market.
