Everyone loves payday. Just like everyone else, once I get that sweet deposit in the bank it starts burning a hole in my pocket. Before much time I am ready to blow it all on a shopping spree. My store of choice is the stock market, and I’m shopping for the best deals on companies. Here is what I dropped my $1,000 on this Friday, October 26th.
Roku Inc. (ROKU)
The twenty-second pick of the Let’s Be Millionaires investment series goes to Roku Inc.
Roku is a manufacturer of devices that allow you to access streaming services directly from your TV. Roku essentially turns your TV into a smart TV but it does so seamlessly. Their devices are easy to use and allow people to stream Netflix, Hulu, HBO, and many more straight to their TV. More and more people are cutting the cable so Roku is well positioned to take advantage of this.
Check out the Roku website here.
About The Stock
Roku went public in late September of 2017 and started out trading for around $25 a share. The price soon dropped to $20 and hovered around there until November of 2017 when it doubled to $40 a share. It then proceeded to rally up to nearly $60, before pulling back to the low 30s. From May 2018 to the start of October 2018 the stock rallied from the low 30s all the way up to $77 a share. With everything selling off this October Roku stock has been no different. The stock is now well off its all-time-high and trading around $52 a share.
Roku does not have positive earnings and therefore does not have a P/E, however, the company does have sales of 500 million dollars. At a current market cap of 5.5 billion that puts ROKU stock at a price to sales ratio of 11. That is expensive and means that analysts are expecting a lot of future growth.
This stock could be categorized as a international, tech, mid-cap growth stock.
The Speculation
I knew Roku was serious business when I went home for the weekend and my parents had one. We are not exactly a family of early adopters, so if my parents had made the switch to Roku I figured it was worth some research on my part.
Roku already has 25% market share in the US when it comes to streaming devices and if they can build that share internationally they can be worth a lot more than $5 billion. I could also see a big player deciding to buy into their story and go ahead and acquire them before all of the growth comes.
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