Two Powerful Shares to Maintain for a Two-Decade Investment Tenure
Exploring emerging consumer brands before they become household names can be a lucrative investment strategy. The stock market presents plenty of such opportunities. To identify these gems, pay attention to the brands people are increasingly drawing towards. In this piece, we've selected two such fast-growing brands with immense potential to reward investors over the subsequent 20 years.
1. Cava Group (CAVA)
Remember the investors who bought stake in Chipotle Mexican Grill, McDonald's, or Starbucks during their early years of growth? Well, they are sitting pretty now. Cava Group (CAVA 0.61%) is the newest high-flying restaurant stock that might just offer a new chance at substantial gains.
Mediterranean cuisine is quickly gaining popularity due to its perceived health benefits and sophisticated image. Unlike the sea of burger, steak, pizza, Italian, Chinese, and Mexican chains, Cava provides a unique offering. Its impressive customer traffic even in this challenging economic climate reflects double-digit increases in same-store sales.
Cava's 185% surge over the past year may give you pause, but it's not too late to jump on board. Its year-over-year revenue growth matches Chipotle's pace in its initial years, indicating that Cava still has long-term potential. If you invested $10,000 in Chipotle back in 2006, you would now own $634,000.
Cava's quarterly revenue of $231 million pales in comparison to Chipotle's $2.9 billion. Nevertheless, it has only been in 25 U.S. states for now, with a strong debut in Chicago. This rapid expansion, coupled with a profit of $19 million in the last quarter, bodes well for the stock's future.
2. On Holding (ONON)
The athleisure boom of the 21st century offered numerous investment opportunities, with a $10,000 stake in Nike in 1978 growing to an astonishing $7.7 million today. On Holding (ONON 2.93%) looks set to provide investors with a similar possibility as it mirrors Nike's growth trajectory from the 1980s.
On is currently the hottest brand in the athletic apparel industry. Its presence at the Paris Olympics in 2024, with 66 sponsored athletes, shows its rising prominence. Similar to Nike, On produces most of its sales from high-performance shoes, which saw a 28% year-over-year increase last quarter.
On's strong growth is apparent in all its shoe offerings, with its Cloudtilt model, particularly popular. The brand's recent launch of its Cloudsurfer Next shoe at a reasonable price point aims to attract a more diverse market segment. On's popularity among athletes and performers like Zendaya offers vast potential for brand development.
Analysts project ONON to increase earrings at an annual rate of 34% over the following years, which should translate into attractive returns for investors. This makes it one of the most promising stocks with great growth potential for long-term investors.
Sources:
- JustDial.com
- Nike History
- CNBC
- Statista
- Investing in Cava Group (CAVA) could potentially offer similar returns to those who invested in Chipotle Mexican Grill, McDonald's, or Starbucks early on. The Mediterranean restaurant chain's impressive growth and revenue indicate its long-term potential.
- On Holding (ONON) may present an opportunity similar to investing in Nike in the 1980s, with its strong growth in the athletic apparel industry and projected earnings growth. Its diverse appeal and prominent presence in sports events and pop culture suggest significant potential for further growth.
