Is Now The Best Time To Look At Fintech Stocks?
The global trend towards financial technology has made fintech stocks a hot commodity. If you have purchased anything online recently, you’ve obviously engaged the services of a fintech company. And even if you don’t, at least one person in your house surely did purchase goods online through a fintech company. While companies like Visa (V stock Report) and MasterCard Incorporated (MA Stock Report) are fairly well-known in the payment industry, others operate behind the scenes. While some are more popular among the younger demographics.
Fintech has been a fast-growing space as many financial services related companies increasingly incorporate technology into their innovations. And of course, e-commerce requires a healthy relationship with financial institutions. Thus, fintech companies are in a sweet spot of the payment revolution. Looking for investments in the fintech space can be a great way to produce market-beating returns. While many other businesses are struggling against Covid-19 headwinds, fintech companies are finding more tailwinds.
Long gone are the days where you have to be physically present to carry out a transaction. From mortgage applications to making electronic payments, fintech has enabled a lot of conveniences without leaving your house. With certain cities still fighting to contain the virus, the industry has made its importance felt more than ever. As a result, there has been a significant rise in digital payments as people purchased essential goods and other services online. With fewer cash transactions, this could reduce our risk of contracting the virus.
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Top Fintech Stocks To Buy Right Now [Or Avoid]: Paypal
When you think of fintech, you think of PayPal (PYPL Stock Report). To many, it’s the pioneer of the fintech space. The company essentially created the industry and was the first digital payment processor that has had solid growth since its inception. Of course, being the pioneer helps. That keeps the company ahead of the competition as it continues to forge new partnerships and acquisitions to increase its economic moat.
After reporting strong double-digit percentages growth during the first quarter of 2020, PayPal continues to make strategic partnerships with retailers and financial institutions to give customers digital payment options. But you may have guessed that PayPal might have seen an unprecedented acceleration in the second quarter. This comes after more consumers made purchases online during the stay-at-home orders.
Analysts from Goldman Sachs (GS Stock Report) are increasing their target price to $205 ahead of their second-quarter report next week. Goldman also kept the fintech stock on the Conviction List, the bank’s most bullish roster of stocks. Having said that, would you consider adding PayPal stock to your portfolio?
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Top Fintech Stocks To Buy Right Now [Or Avoid]: Square
Shares of Square (SQ Stock Report) hit all-time highs this month. As the Covid-19 pandemic continues to hit new peaks in states across the country, many investors are putting their money into e-commerce related stocks. The rally with SQ stocks could also have something to do with Square’s Cash App as investors came to realize the potential it entails.
The Square Cash app, a peer-to-peer money-transfer service, competes with PayPal’s Venmo, Zelle, and others. Amid the coronavirus pandemic, Cash App emerged as a digital alternative to traditional banks. For instance, consumers who are using the Cash App’s direct-deposit feature can also receive government stimulus payments. In addition, the Cash App also enabled its users to trade cryptocurrencies on its platform. And to top it all off, the platform recently added a stock trading feature.
Just in case you haven’t noticed, SQ stocks have climbed more than 200% from its March low. While the gains are great for shareholders, investors might want to tread carefully when volatility in the stock market is an old friend who visits once in a while.