3 Stocks For Millennial Buyers
Updated: Aug 28, 2019
Millennials are now investing more than ever before, but where should they be putting their money?
It’s no surprise that investing is becoming more popular around the world. With the rise of the internet spawning dozens of research platforms and cheap brokerage providers, it has never been easier for would-be investors start your portfolio.
In particular, investing has become quite popular amongst millennials, with recent research showing that nearly 7 in 10 are investing financially in some form. It is important then to know what millennials should be investing in as this will be the next generation driving the global economy.
Here we take a look at 3 possible companies that millennials could look to that suit their demographic.
Almost everyone in the U.S. has used an Uber (NYSE: UBER) service at some point or another. The company first went public in May 2019 and has since reported that roughly a quarter (27.6%) of its investors fit into the millennial demographic. This investment may be more of a risk than others as the company recently reported an operating loss of over $5 billion in their Q2 finances. The company is down, but not out, with company CEO, Dara Khosrowshahi chalking it up to 2019 being a “peak investment year,”.
Millennials have grown up in an age of instantaneous digital connection and convenience, and Uber was one of the driving forces of this. It is no secret that millennials are more urbanized than previous generations (9% more, in fact) and with the rise of renting culture, this demographic is less likely to own a car. As of 2018, Millennials made up almost half of all ride-sharing customers, making them the primary target demographic for competitors.
With operating losses of $2.39 per share in their first quarter, the company may still be finding its feet in public trading. Despite this, its UberEats food delivery service has gone from strength to strength in the U.S. while analysts predict that the ridesharing market will reach a market size of $218 billion by 2025 on growth of almost 20% from 2018.
As the biggest player currently in the market, the future holds promise for Uber.
Take-Two Interactive (NASDAQ:TTWO) is one of the biggest names in the $135 billion video gaming industry, and if you do not know the name, you will certainly know some of its titles, which include legendary series’ such as ‘Grand Theft Auto’ and ‘Red Dead Redemption’. Their recent quarterly results showed very positive results with revenue rising to $540.5 million from $388 million in the year-ago period, which supports their claim as one of the best stocks to own on the S&P 500 Index in August over the past decade.
Many millennials will have grown up playing games that Take-Two have created. Even now gaming is massively popular among the demographic, and with the rise of competitive esports gaming, this trend does not appear to be slowing down. Overall, the global esports audience is projected to double in the next three years from 300 million to more than 600 million viewers, while roughly 1.5 billion people had some knowledge of the phenomenon by the end of 2018. If you are a millennial and grew up loving these games and the company behind it, it is better to invest in something that you believe in and understand.
With analysts predicting that there will be almost 3 billion people on the planet gaming by 2021, there is a lot to suggest that the industry may be a smart long term investment for younger buyers who grew up playing these games. Despite mixed analyst opinions as a whole at the beginning of the year, large gaming developers such as Take-Two may have a bright future ahead, especially following such positive quarterly reports, so it could be worth getting involved early rather than late.
Alibaba Group Holdings
The online shopping giant behind AliExpress has come a long way in 9 years. With some upheaval in the market thanks to international trade disputes, much of the current news surrounding the company is mixed, but there is no denying their impressive rise to compete with the likes of Amazon, controlling 50% of the Chinese eCommerce market.
The stars are aligned for AliExpress when it comes to the Millennial demographic: a group who grew up in a world of online retail came of age during the recession and learned the value of savings, which ensured that they could see the value of such a discount buy, which is what AliExpress provides. It is the same mentality which has turned discount chains such as Walmart or Aldi into such powerhouses. This is also the demographic which likes things to be brought straight to their door, and can easily be bought through a tablet or phone. It is obvious then why they would make up 26% of the company’s shareholders.
Going forward, the group is also the largest online retailer in its home country of China, the second largest and most populated economy in the world. As well as this it has been steadily building a platform for the future outside of its cloud segment, including food delivery, digital entertainment, and online payment platforms. A fast-growing company with a hold on a massive population and rising buying power is always a good investment. With the continued relaxation of China's digital restrictions, their domestic customer base of 600 million will only continue to grow, so now may be the time to buy.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in Uber, Take-Two Interactive and Alibaba Group Holdings. Read our full disclosure policy here.