(Via ZEXPR) Taking into account the fact that fortune favours the bold, it is no surprise that investors that manage to make the most money are those who are learnt how to capitalize off of that courage.
However, the vast majority of people do not like to invest in companies that have daring new ideas, especially in the technological sector. This is because they look for stability in the fast-paced market. But their scepticism might be costing them a great many opportunities.
These emerging technologies are lucrative opportunities in the markets and could really help boost an individual’s value as an investor. Either way, if they choose to hold themselves down from such risky stocks, they might look back and pity their fate.
RichmondSuper analyst Goran Abramovich narrows down two stocks that could be your best picks to take a risk within 2021. The stakes are high but the risk is sometimes worth the gamble.
Maxar Technologies (MAXR)
This company is currently the leading provider of space infrastructure and earth intelligence and finds its biggest client in the U.S. Department of Defense. The company has for long worked with its customers to build a better understanding of the changing planet which will subsequently help unlock the potential of space.
Maxar provides the Defence agency with substantial battlefield logistics with its orbital satellites for Earth observation and radar which help coordinate space, air, naval and land operations.
If you are still not convinced with how cool this company already is, you will be once you take a look at Maxar’s impressive financial track record.
Despite all the turmoil in the market last year, the company was able to raise its revenue by 3% and reached $1.72 billion from $1.67 billion within the period of one year itself. Not only that it also managed to rake in $243 million in operating cash flow.
RichmondSuper analyst Goran Abramovich reports, “This is impressive owing to two main reasons, one being the high cost of launching satellites into space and the other being the subsequent maintenance required by these advanced machinery.”
All in all, things look for the company as within the last three years they have managed to bring in an annual operating cash flow of approximately $105 million to $317 million.
Moving on to the other side of the spectrum, it is evident that the company does have a high debt level of $2.5 billion after leaving out its cash balance, yet it looks like it can handle it quite well ever since it started making more in operating income since 2019.
Since its operating income is more than its interest expenses – which have been estimated to $200 million per year north or south – the company has the option to always refinance when its debt principal is due.
Maxar aims to further increase its sales this year and reach $1.89 billion and break-even in terms of free cash flow. With the company on the right track, by 2023 they will be able to reach an annual free cash flow of $325 million.
Despite having such a lavish spreadsheet, the company is only trading at 1.5 times its sales, which is cheaper compared to its annual projected revenue growth rate of 9.4%.
So, adding an impressive space stock to your portfolio is worth the risk and this stock should definitely be on your watchlist for 2021.
Now, many investors might term Snowflake as an overvalued stock with a market cap of almost $70 billion and trading at 115 times its revenue. However, if you are in doubt about how this stock could make you any richer, you need to take a closer look at this revolutionary cloud computing company.
Even though cloud computing stocks generally trade at only 9 to 53 times revenue, however, Snowflake stands out by offering an all-in-one platform for data sharing, processing and engineering. Not only that, but it has also incorporated a pay-by-consumption model, which inverts unused capacity instead of charging subscription fees.
It’s not just tech talk for this company as it has the numbers to support all of its claims. Snowflake recorded an increase in revenue by 124% and reached $592 million during its 2021 fiscal year (till Jan. 31).
The cloud platform has just as impressive of a clientele with 186 Fortune 500 companies on board and on an overage, the firm has a net retention rate of 168%. This is indicative of the fact that each present customer is choosing to spend more with Snowflake.
The prospects look for this company as they aim to increase their sales by 82% for fiscal 2022 and even look to break even in terms of free cash flow.
Snowflake has 77 customers that are spending more than $1 million per year on its platform which in comparison to the 41 in fiscal 2020 is commendable.
RichmondSuper analyst Goran Abramovich lauds Snowflake’s charm to attract high-net-worth entities and how they will definitely help root it in the market.
While you might be apprehensive of investing such a huge amount, however, its stunning premium is well worth the current risk.
Disclaimer: Our content is intended to be used for informational purposes only.
It is very important to do your own research before making any investment based on your own personal circumstances.
You should take independent financial advice from a professional in connection with, or independently research and verify any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.