The best stock to buy may not always come from Singapore.
Many investors feel comfortable investing in only locally-listed companies but the truth is that there is a much wider breadth of companies in overseas markets.
The growth profiles of some of these companies are also significantly more impressive than their Singapore-listed counterparts as they have larger home markets that can support a large customer base.
Examples of such growth companies can be found in the US stock market.
For investors who are ready to dip their toes into the US market, here are three stocks that you can consider buying with US$10,000.
Starbucks (NASDAQ: SBUX)
Starbucks is a familiar name with its recognisable logo seen in cafes within numerous malls around Singapore.
Coffee culture has taken strong root in Singapore and many enjoy the ambience offered by Starbucks’ cafes while sipping a hot cup of coffee.
The business itself has grown steadily over the years. Revenue grew from US$19.2 billion in the fiscal year 2015 (note that Starbucks has a September 30 fiscal year-end) to US$26.5 billion in the fiscal year 2019.
Net profit jumped from US$2.75 billion to US$3.6 billion over five years, and dividends per share from US$0.68 to US$1.49 over the same period.
In its first-quarter fiscal year 2020 report, Starbucks announced that comparable store sales were up 5% globally, led by both China and the US. Active Starbucks Rewards Membership in the US grew 16% year on year to 18.9 million.
However, the impact of COVID-19 has hit Starbucks hard. The company had to shut most of its China stores in late-January, and only opened them by late March.
By late March, only around 44% of US company-operated stores were in operation, under modified store hours and with only the drive-thru channel still active.
The adverse impact is expected to be temporary, though. Starbucks shares are down 18% year to date, closing at US$72.
Apple (NASDAQ: AAPL)
Widely acknowledged as the pioneer in the smartphone industry, Apple needs no further introduction.
What’s amazing is how the company has managed to come up with a new iPhone iteration every single year and record healthy sales.
Aside from its iconic iPhone, Apple has also come up with the iPad, Apple Watch and a range of accessories and services.
The iPhone still makes up more than half of total revenue, but the wearables and services divisions have been increasing its contribution to the total, now making up 11% and 13.8% of total revenue for the first quarter of the fiscal year 2020.
The company’s market capitalisation has doubled in the last five years and is now worth more than a trillion US dollars.
Apple’s innovative culture and intensive research and development efforts still manage to yield new and refreshing products to excite its customers.
These attributes should help to power the company’s business over the long-term.
Facebook (NASDAQ: FB)
Social media usage has grown tremendously over the last decade, powered by the proliferation of smartphones.
The giant in this space is no other than Facebook, which also owns chat program WhatsApp and photo and video-sharing social networking service Instagram.
The company reported total revenue of US$70.7 billion for the fiscal year 2019, up 27% from a year ago.
Net profit, however, dipped by 16% year on year to US$18.5 billion mainly due to higher legal fees and settlements.
Daily and monthly active users (DAU and MAU), two metrics that measure user engagement across Facebook’s platform, continued to grow.
DAU rose by 8.8% year on year to 1.66 billion users, while MAU increased by 7.7% year on year to 2.5 billion users.
The constant user engagement allows Facebook to continue to earn significant sums of money from advertising, which is its main source of revenue.
Facebook’s share price has doubled over the last five years, and the company is now worth almost half a trillion US dollars.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
