Three sectors that are changing rapidly are biotech, automobiles and advertising. Within these shifting sectors, growth investors with risk tolerance should look for up-and-coming stocks to buy that will be truly disruptive.
Of course, biotech is evolving all the time, as new drugs and new technologies are constantly being discovered and unveiled. Artificial intelligence is also revolutionizing the biotech sector.
Meanwhile, thanks to the transition to electric vehicles, the auto sector is shifting tremendously. As a result, investors who pick the right up-and-coming stocks to buy within that space will do extraordinarily well in the long term.
And finally, the advertising market is rapidly digitizing and automating, while cable and satellite are being displaced by internet television. Those transformations create tremendous opportunities for investors.
Here are four up-and-coming stocks to buy that will allow long-term investors to benefit from these rapidly shifting trends.
- vTv Therapeutics (NASDAQ:VTVT)
- Schrodinger (NASDAQ:SDGR)
- Arrival (NASDAQ:ARVL)
- PubMatic (NASDAQ:PUBM)
Stocks to Buy: vTv Therapeutics (VTVT)
I’ve owned vTv Therapeutics stock for several years, and I wrote a column about the name back in February 2020.
In that article, I stated that the company had “two drugs that have great chances of becoming blockbusters.” One of the drugs, a treatment for dementia, didn’t work out for vTv. But the other one, TTP399, which seeks to alleviate Type 1 diabetes, is proceeding very well so far.
Specifically, on Feb. 23, the company announced Phase 2 data which indicated that the drug triggered “statistically significant reductions in HbA1c” (a measure of blood sugar) as well as a “reduction in the frequency of severe or symptomatic hypoglycemia.”
On April 13, vTv disclosed that, based on the data derived from trials of TTP399, the FDA had designated the drug a “breakthrough therapy.” In addition to validating the extremely strong potential of TTP399 and showing the FDA’s strong interest in the treatment, the designation will enable vTv to get increased backing from the government for the drug, while allowing the company to expedite development of the treatment.
As of December, billionaire Ronald Perelman owned 36.6 million shares of VTVT stock. This indicates that experts are upbeat about TTP399.
Schrodinger uses AI to expedite the drug development process, which is currently quite long and arduous.
In November 2020, it announced a “multi-year collaboration” with Bristol Myers Squibb (NYSE:BMY). Under the alliance, Schrodinger will use its technology to identify drug candidates for “oncology, immunology, and neurological disorders,” and Bristol Myers will then further develop the candidates. Schrodinger will obtain $55 million from the giant drug maker “upfront,” but it can “receive up to $2.7 billion in milestone payments plus royalties,” it stated.
The agreement is a major validation of Schrodinger’s platform and, of course, gives the company the opportunity to make a tremendous amount of money over the longer term. Also providing tremendous validation of Schrodinger and its technology, in the fourth quarter of 2020, The Bill & Melinda Gates Foundation Trust purchased 2 million shares of SDGR stock , raising its total stake in the company to 7 million shares.
As I noted in a previous column on Arrival , “Arrival’s vehicles are reportedly priced similarly to vehicles with conventional internal combustion engines, aka ICE vehicles,” while the company expects to be profitable in 2023.
The van and bus maker has managed to use its microfactory system to carry out this revolution.
A major believer in this system is UPS (NYSE:UPS), which has reportedly agreed to buy 10,000 of Arrival’s delivery vans. Recently, that agreement took a major step forward, as Arrival presented the delivery giant with a “prototype” of its electric delivery vehicle. In a video tweeted out by Arrival on April 21, Luke Wake, VP of Maintenance & Engineering, UPS Corporate Automotive, said the EV would be “upgradeable, adaptable, and future-proof.”
Stocks to Buy: PubMatic (PUBM)
PubMatic provides “advertising tech” for news websites, video streaming companies, and others.
Another InvestorPlace contributor Luke Lango, has strongly touted PUBM stock, writing that the company “has amassed the largest and most valuable data-set in the sell-side programmatic ad tech world.”
In a note about those who can benefit from Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) decision to avoid using third-party cookies for tracking purposes, KeyBanc recently wrote that PubMatic’s products can be used in conjunction with “alternative IDs and first-party publisher data.” The firm thinks that the company can continue to grow its revenue by more than 20%.
In February, the company reported that its Q4 revenue had grown an impressive 64% YOY, and it predicted that its Q1 sales would jump 34%-41% YOY. PubMatic’s Q4 EPS came in at 34 cents, up from 6 cents during the same period a year earlier.
Given PubMatic’s relatively low market capitalization of $2.71 billion, the shares have a very long way to run over the long-term.
On the date of publication, Larry Ramer held long positions in VTVT, ARVL, SDGR and PUBM.
Larry has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Among his highly successful contrarian picks have been solar stocks, Roku, and Snap. You can reach him on StockTwits at @larryramer. Larry began writing columns for InvestorPlace in 2015.