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3 ‘Founder CEO’ Stocks to Buy as 2022 Gets Underway

Founder CEO Stocks - 3 ‘Founder CEO’ Stocks to Buy as 2022 Gets Underway

Source: Shutterstock

It’s been a weird couple of weeks for some companies. Facebook changed its name to Meta (NASDAQ:FB), while Square (NYSE:SQ) changed its name to Block. In a separate although related note, Square’s CEO Jack Dorsey also announced he will step down as CEO of Twitter (NYSE:TWTR).

When a stock is mired in poor performance, a change at the top often spurs a gain in the share price. That happened in this case, but the rally was short-lived after Twitter announced CTO Parag Agrawal as the new CEO.

It was a promotion within the company and it was clear the market wanted someone from the outside to shake things up. Nonetheless, that inspired us to look at a few founder CEO stocks of our own.

However, the market would not respond with a rally if these founders were to step down. They are:

  • Nvidia (NASDAQ:NVDA)
  • The Trade Desk (NASDAQ:TTD)
  • Roku (NASDAQ:ROKU)

Now, let’s dive in and take a closer look at them now in order of market cap.

Founder CEO Stocks to Buy: Nvidia (NVDA)

Nvidia (NVDA) logo on the indoor wall of a corporate building made of yellow tiles

Source: JHVEPhoto / Shutterstock.com

Nvidia has long been a favorite among investors, but it has taken a lot of years for it to pay off for CEO Jensen Huang. He founded the company in 1993 with two other computer scientists.

Almost three decades later, and Nvidia is one of the largest companies in the world, with a market capitalization of a little more than $750 billion. I have long been bullish on this stock, but can’t say that I’ve been behind it for 28 years!

It’s easy to say now, but earlier this year I made the case for a $1 trillion market cap for the company. Back in March 2020, I made the case that it’s a “steal” below $200. That’s true even now, but it was written on a split-adjusted basis, so a steal below $50.

It’s hard to believe we had that opportunity in 2020. In any regard, though, the long-term looks incredibly bright for this business.

Overall, the company has consistently delivered upside beats to both earnings and revenue. It has robust profitability and more than once we’ve pointed out the huge increase in top- and bottom-line expectations.

Despite this, analysts still expect about 60% revenue growth this year, followed by almost 20% growth next year and 16.5% growth in 2023. For all we know, these estimates are conservative, too.

Nvidia has its hands in every meaningful growth opportunity going forward, including cloud-computing, datacenters, graphics and computing power. Additionally, the firm is also involved in a few other hot sectors like artificial intelligence, machine learning, autonomous driving and everyone’s new favorite buzzword: The metaverse.

Founder CEO Stocks to Buy: The Trade Desk (TTD)

The logo for The Trade Desk is displayed on a smart phone.

Source: Tada Images / Shutterstock.com

Next, we have The Trade Desk. While shares are down from the recent high, this has been one of the best-performing growth stocks this year. While most other growth stocks have been under pressure, this one has stood strong.

Jeff Green is the co-founder, chairman and CEO and has continued to do an incredible job navigating the company.

While Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) and Facebook are banned in China, The Trade Desk has found a way to operate peacefully here. It’s leveraging artificial intelligence to drive robust growth and perhaps most impressively, the company is also profitable.

Analysts expect 42% revenue growth this year, 30% growth in 2022 and 27% growth in 2023. All the while growing its bottom line.

The downside to the stock? Well, it’s not cheap. Shares trade at 36 times this year’s revenue and 28 times estimates for 2022. Even in a bull market, this is pricey, but that’s the way it goes.

Sometimes high-quality companies trade at a stellar valuation and they don’t give up that premium easily. Need another example? Just look at Shopify (NYSE:SHOP), which trades at 37 times this year’s revenue estimates but commands a market cap of $183 billion and is up 2,600% in the past five years.

Founder CEO Stocks to Buy: Roku (ROKU)

The Roku logo on the side of an office building comprised of sand colored concrete

Source: JHVEPhoto/Shutterstock.com

Last but not least, we have Roku. The company is operating in the center of a massive trend: Streaming video.

Whether that’s YouTube or through one of the many new streaming platforms that are now available, almost all of it can be done through the easy-to-use platform of Roku.

When chairman and CEO Anthony Wood founded the company in 2002, it was a much different world. Additionally, the hardware was the main product. Now Roku doesn’t look at hardware to drive its results.

Instead, the company has partnered with several TV manufacturers to build Roku-based smart TVs, while selling its streaming devices in an effort to drive its platform revenue.

Despite the stock price falling almost 60% from the all-time high to the recent low, there are many positives going on with Roku.

First, growth remains robust as streaming TV remains a secular growth theme. Second, the company recently came to a new multi-year deal with YouTube, which was one day away from expiring. Third, the company’s gross profit, free cash flow and revenue continue to surge on the back of strong platform growth.

Last quarter it generated 18 billion hours of streaming, up 21% year-over-year (YOY). Active accounts climbed too, up 23% YOY to 56.4 million customers. Safe to say, regardless of the stock price, Roku is doing quite well.

On the date of publication, Bret Kenwell held a long position in NVDA, TTD, ROKU. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.


Article printed from InvestorPlace Media, https://investorplace.com/2022/01/3-founder-ceo-stocks-to-buy-as-jack-dorseys-twitter-exit-makes-headlines/.

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