The most direct route to double my money through stock market investments today is by looking towards the long term. More than one sector is thriving and looks like it has great prospects ahead. I reckon that if I invest in high-quality stocks in these sectors, I could see some solid returns in the years to come.
Booming online sales industry
One example of these thriving sectors is the online sales industry. In the pre-Covid-19 time, it was already acknowledged that sales would turn increasingly digital overtime. But 2020 really brought that possibility home.
As we hunkered down when the coronavirus raged outside, online orders rose. From groceries to gadgets, consumers have been buying online like never before.
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Many FTSE companies have benefited from this trend. And if the latest numbers are anything to go by, they continue to do so. This, in my view, makes it a good time to think of investing in them.
Just Eat Takeaway: runaway growth
One of these is the FTSE 100 food delivery provider, Just Eat Takeaway (LSE: JET). 2020 was, expectedly, an exceptional year for it. In its annual numbers released earlier today, it reports a 54% increase in revenues for the year. Its earnings before interest, taxes, depreciation, and amortisation (EBITDA) also grew by 18%.
Moreover, it also became much bigger in 2020 through mergers and acquisitions. The merger of the UK’s Just Eat and Netherlands’ Takeaway.com, was approved in April last year, creating JET, just as the coronavirus was taking hold of our lives and business.
In another couple of months after that, it also acquired US-based Grubhub to increase its footprint in this largest consumer market.
In essence, we are now looking at a big multi-national delivery provider which is also growing fast. For me that is a good reason to invest in the stock.
Risks to the investment explained
It does have risks associated with it, though. JET reported an operating loss for 2020, which would be an alarm bell to any investor. But it has a good explanation for it. It has to make significant investments to increase its market share in a competitive market. I would be less convinced of its ability to do so in a slow growing market, but I find it convincing here.
Moreover, competition is heating up. Deliveroo will soon get listed in London too. And it already has Amazon’s backing, which has shown exceptional logistics’ abilities in 2020.
I was also cautious of what JET’s outlook for 2021 would be, till yesterday, because it may not be able to repeat last year’s performance as restaurants open up post-lockdown in June (the UK is still JET’s biggest market). But so far, things are going quite well on that front too. In the first two months of 2021, JET reports an 88% increase in orders compared to the same time last year.
Should I invest?
JET was already a good stock to buy, and now more than before, I believe it can double my money over time. At its current share price of around £72, investing about £1,500 in it would buy me a nice round figure of 20 shares.
