Investors are sometimes hesitant to purchase shares in companies that are experiencing difficulties. However, regardless of how bleak their current situation appears, it’s critical to identify organizations with promising future prospects. In today’s market, it’s rare to locate diamonds in the rough. Consider why an electric vehicle battery manufacturer, a pharmaceutical business developing a promising cancer medication, and a digital rental insurance company are among the most intriguing companies to buy right now.
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QuantumScape is the first game in the QuantumScape series.
QuantumScape (NYSE:QS) is the only company on this list that does not have any revenue. Its market capitalization, on the other hand, has risen to $22.36 billion. In fact, in the last year, the stock has nearly tripled in value.
It’s simple to see why investors are so enthusiastic about QuantumScape. Electric batteries with the highest energy per unit mass in the industry have been produced by the company. That means QuantumScape’s batteries are extremely efficient: a battery that weighs less but provides the same amount of energy as a heavier one requires less effort and materials to make. Electric vehicles equipped with QuantumScape batteries will have a maximum range of 450 miles, saving 17 percent more energy than their competitors. The battery also has a lengthy life span, lasting up to 150,000 miles before losing 70% of its stored energy (discharged).
Considering that electric vehicle batteries can cost upwards of $10,000 per car, this is quite groundbreaking. Volkswagen (OTC:VWAGY) plans to introduce electric vehicles in the next decade, with a target of delivering 25 million vehicles, and the German automaker has backed Quantum’s technology with a $300 million investment.
QuantumScape has completed over 2.6 million tests on 700,000 of its battery cells thus far, with plans to begin production in 2024. This is a hot manufacturing stock to watch due of its innovative solid-state battery technology.
2. Merck & Co.
Merck (NYSE:MRK) is one of the cheapest stocks in the sector, with a price-to-earnings ratio of just 12 times. However, this is partly due to the COVID-19 pandemic, which resulted in a drop in sales of the company’s discretionary drugs. Revenue climbed by 2% year over year to $48 billion in 2020, but net income fell by 28% to $7 billion. Keytruda, a cancer immunotherapy medicine, was the year’s big winner.
Sales at Keytruda climbed by 30% year over year to $14.4 billion. Melanoma, lung cancer, head and neck cancer, lymphoma, urinary tract cancer, bladder cancer, and solid tumors are among the cancers that the medication can cure. It has a significant impact on the size of tumors and the survival rates of patients.
Keytruda has a lot of room to expand, and its patents aren’t set to expire until 2028. While you’re at it, take a look at what Merck’s strong pipeline has to offer. A collaboration with Gilead Sciences (NASDAQ:GILD) to develop a combination medication for the $30 billion global HIV market is one example. Furthermore, the shares of the pharmaceutical behemoth pays a 3.3 percent annual dividend.
Lemonade is number three.
With a market worth of $6.775 billion but only $94.4 million in revenue and a staggering net loss of $122.3 million last year, it’s no surprise that many investors are perplexed as to why Lemonade (NYSE:LMND) stock continues to rise. Despite the poor performance, the stock is up more than 72 percent year over year.
At first sight, the organization appears to be a standard insurer that offers rental, pet, and home insurance. What’s more, Lemonade is now the best renters’ insurance business in the country in terms of plans, pricing, billings, claims, and customer service. Customers may get a quote on Lemonade’s website in as little as 90 seconds and buy an insurance through the app without ever speaking to a salesperson.
It’s also shockingly reasonable, with monthly rates starting at $5. Customers’ claims are typically paid out in less than three minutes if the unexpected occurs, with 30% of claims paid out immediately after submission. In terms of financial stability, the corporation has an A rating.
Lemonade now has over 1 million customers, up 56 percent over the previous year. Its gross loss ratio fell ten percentage points from 2019 to 71 percent last year, meaning it pays out $0.71 for every $1 in premiums collected.
An ambitious sales and marketing campaign to increase market share accounts for a large portion of its net loss. In 2020, it set aside $80.4 million of its sales for this reason. I’d predict phenomenal increase in sales and return for investors over the next few years, given the company’s fast rising brand awareness across the country. For Lemonade stock, the sky is the limit.
This post is the author’s own view, which may differ from a Motley Fool premium advice service’s “official” recommendation position. We’re a mishmash! Questioning an investing theory, even our own, encourages us to think critically about investing and make decisions that will make us smarter, happier, and wealthier.
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