Forget Sundial and GameStop: Buy These Game-Changing Stocks Right Now

Last year, the promise and fear surrounding the coronavirus disease 2019 (COVID-19) drove volatility in the stock market. In early 2021, retail investors have become the market movers.

For roughly a month, retail investors on Reddit’s WallStreetBets (WSB) chatroom have effectively worked together to pile into certain stocks. Their targets are often heavily short-sold or have penny-stock share prices. In nearly every instance, they’re losing money or struggling to keep their figurative heads above water.

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News flash: There’s nothing special about GameStop or Sundial Growers

Two of the most popular stocks among WSB users are video game and accessories retailer GameStop (NYSE:GME) and Canadian marijuana stock Sundial Growers (NASDAQ:SNDL). Although retail investors have successfully driven up the share price for both stocks, neither company is truly worth investing in.

For example, GameStop has traditionally been a brick-and-mortar gaming company. It’s only recently begun pushing digital downloads. Even with e-commerce sales growing by triple digits, the company’s total sales have been in freefall, and it’s been losing quite a bit of money. GameStop is currently trying to close stores to reduce expenses and backpedal its way into the profit column.

Meanwhile, Sundial Growers has been drowning its investors in new share issuances. Following the exercising of 98.3 million warrants last week, the company has ballooned its outstanding share count by over 1.1 billion since the end of September 2020. Sundial might have close to $680 million in cash on its balance sheet, but its roughly 1.66 billion outstanding shares make it virtually impossible for the company to ever generate any meaningful earnings per share.

The simple fact is that neither company is game-changing or all that innovative.

These stocks are the real deal

If you want investments that offer game-changing, sustainable returns, you should consider buying the following three stocks right now. 

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Intuitive Surgical

For the past two decades, robot-assisted surgical system developer Intuitive Surgical (NASDAQ:ISRG) has been changing how the healthcare industry approaches soft tissue surgeries. Since the beginning of the century, nearly 6,000 of its da Vinci surgical systems have been installed worldwide, which is far more than all of its competitors combined. Intuitive has developed two decades’ worth of rapport with medical providers, making it the clear leader in precision-based soft tissue surgeries. 

Da Vinci is currently the market share leader in urology and gynecology procedures. However, a much larger runway lies ahead for Intuitive Surgical’s top-selling device. In particular, it’s expected to gobble up share in colorectal, thoracic, and general soft tissue procedures throughout the decade.

Arguably the best thing about Intuitive Surgical, from an investing standpoint, is that it’s built to generate beefier margins over time. Its da Vinci systems are pricey ($0.5 million to $2.5 million each), but they’re also costly to build, leading to mediocre margins. Intuitive Surgical generates the bulk of its operating margin from selling instruments and accessories with each procedure, as well as servicing its systems. Put simply, the more systems installed, the higher the percentage of sales from these higher-margin segments.

With Intuitive Surgical not done on the innovation front and regularly introducing new technologies to improve patient care, it should continue to offer double-digit growth potential throughout the decade.

Image source: Square.

Square

Another game-changing company that should be bought hand over fist is fintech stock Square (NYSE:SQ). The War on Cash is real, and Square should be a prime beneficiary.

Square’s most profitable platform (from the perspective of gross profit) is its seller ecosystem, which provides point-of-sale devices and…