These 3 Stocks Are Helping Build a Better Future: Are They Buys?
One of my favorite pieces of investing advice comes from Motley Fool co-founder and Chief
One of my favorite pieces of investing advice comes from Motley Fool co-founder and Chief Rule Breaker David Gardner, who’s often said, “make your portfolio reflect your best vision for our future.” The idea is to pick companies for your portfolio that are working to create a world you’d want to be part of. Three companies that fit this category for me are Shopify (NYSE:SHOP), Livongo Health (NASDAQ:LVGO), and Asana (NYSE:ASAN). But they’re also great investment opportunities. Let’s find out why.
Shopify: Making commerce better for everyone
Shopify is a software platform that allows businesses of all sizes to establish and run online stores. In 2004, co-founder Tobias Lutke wanted to sell snowboards online but realized there wasn’t any commercially available software to help him get started, so he built his own. It wasn’t too much later that he and his co-founder realized the software platform was a better business than selling snowboards, and Shopify was born.
With his roots in entrepreneurship, Lutke’s personal mission is to “build a path that leads to more entrepreneurs” by making its platform even easier to use, more powerful, and cost-effective for businesses of all sizes. Running a small business is incredibly hard, but the world is better off because of the work of these businesses, which delight their customers with a personal touch. Shopify is an enabler for these organizations and it’s grown tremendously because of it.
The company now supports over 1 million merchants in 175 countries. Part of the reason it’s been so successful is that it aligns a major portion of its revenue with merchant success. When merchants sell more, Shopify makes more money. Last quarter, it recorded its best quarter ever, but that’s because its merchants did too, selling over $30 billion of their products online. As it rides the wave of e-commerce adoption, this mission-driven company will continue to have a bright future.
Livongo: Empowering people with chronic conditions
Livongo was founded to utilize the power of technology to help those with chronic conditions live better and healthier lives.
The idea that a software app on a mobile phone can help someone become healthier is world changing, and Livongo is making that a reality for its users. It’s attracted 410,000 members who use its software on a regular basis to help manage diabetes, hypertension, weight, and behavioral health. But it’s only just getting started. Today, it’s serving only a tiny 1% of the population who has diabetes, so the opportunity is huge.
Last quarter, members grew 113% year-over-year driving revenue growth of 125%. Even better is that Livongo doesn’t make money if members aren’t using its software. That’s why it’s focused on a consumer-first approach to ensure members are achieving positive outcomes. Its approach and track record of success has attracted Teladoc Health, a leading telehealth provider, which will merge with Livongo in the next few months. This will provide additional resources for Livongo to accelerate its mission — and investors will benefit along the way.
Asana: Enabling the world’s teams to work together effortlessly
Asana’s work management software enables project teams to be more effective. At first glance, that may not seem to have the same widespread impact as the previous two companies, but take a look at how its co-founder and CEO Dustin Moskovitz sees the company mission:
Any important project in the world really has one thing in common: a group of people coming together to achieve a shared goal. … And so by working on Asana, it’s an opportunity to work on all of those different missions and more. … [It’s] just this enormous point of leverage to create progress in the world.
Helping the teams that are helping make the world a better place is certainly a lofty goal, and Asana’s just getting started. It’s attracted 82,000 paying customers and last quarter revenue grew 57% year over year to hit an annual run rate of $181 million. Customers are attracted to its tools for their ease of use, but stay for the powerful benefits they experience. A recent company survey of 3,000 customers shows that “83% agreed that Asana improves their job performance, 77% agreed that Asana reduces wasted time at work, and 74% agreed that Asana helps them accomplish tasks more quickly.”
With millions of teams all over the globe trying to accomplish challenging goals, Asana has a tremendous opportunity in helping them get there.
The takeaway for investors
These three companies have missions that appeal to me on a personal level and quality businesses that should generate market-beating returns over the long term. This trio may not be your cup of tea, but I encourage you to find companies that you feel are making our world a better place. Chances are, they may also be a great source for your next stock idea.