Finding growing companies with diverse business models such as Sea Ltd (NYSE:) is one of the smartest ways to generate outsized returns for your portfolio. With that said, it’s important to avoid companies that are over diversified, as this can lead to a lack of focus and edge for a business. That’s part of what’s so special about Sea Limited, as it’s a company with multiple business segments that complement each other well.
It stands out as an investment opportunity that offers the perfect balance between a diverse business model and the potential for long-term market leadership thanks to the company’s widely successful Shopee e-commerce platform that is a dominant force in Southeast Asia. Along with Shopee, this company has several other high-growth opportunity businesses that investors should not overlook at this time.
Here are 3 compelling reasons why Sea Limited stock is special and could be in for even more upside:
1. A Trio Of High Growth Businesses
What if you could own shares in a company that is excelling in three of the most intriguing industries today? That’s exactly the case with Taiwan-based Sea Limited and part of what makes this an attractive growth stock. The company has developed an integrated platform that consists of digital entertainment, e-commerce, and digital financial services. Many of the strongest growth stocks in the market are involved in these industries, and the fact that Sea Limited offers exposure to all three of them is certainly impressive.
The company’s Shopee platform is the leading e-commerce platform in Southeast Asia and Taiwan and helps consumers enjoy online shopping in a convenient and affordable way. Garena is Sea Limited’s developer and publisher that has already developed big hits like Free Fire, the most downloaded mobile game in the world in 2019 and 2020.
Garena is also a leading e-sports organizer, which is a burgeoning industry with tons of potential. Finally, the company’s SeaMoney service is a leading digital payments and financial services provider in Southeast Asia. SeaMoney includes mobile wallet services, payment processing, credit, and more and perfectly complements the company’s e-commerce business.
2. Exposure To Attractive Emerging Markets
Investing in emerging markets comes with its fair share of risk, but investors are also compensated for that risk in a few different ways. For example, stocks like Sea Limited are unique because they offer an opportunity to diversify your holdings and profit from areas of the world that have immense growth potential. Specifically, investors will gain exposure to Southeast Asia, Taiwan, Indonesia, and even Latin America, which are all areas of the world that are becoming increasingly enthralled with digital entertainment and online shopping.
It’s important to note that Sea Limited has very limited operational exposure to China, which is another huge positive to consider given all of the regulatory issues occurring in that country at this time. Finally, the fact that this company is trying to capture market share from Latin America’s biggest e-commerce provider, MercadoLibre (NASDAQ:), by expanding into Brazil, is another intriguing reason to consider adding shares.
The e-commerce industry hasn’t quite taken over Latin America yet, which means there is plenty of room for a company like Sea Limited to develop a strong presence in Brazil. The bottom line is that if you are looking for one of the top emerging markets stocks, Sea Limited is a fine option to consider.
3. Astounding Earnings Growth
While it’s easy to recognize the potential with multifaceted business model, the fact that the company is delivering astounding earnings growth quarter after quarter makes it truly a special investment opportunity. The company had a very strong FY 2020, including total GAAP revenue of $4.4 billion, up 101.1% year-over-year, and total gross profit of $1.3 billion, up 123% year-over-year. Sea Limited also is off to a great start in FY 2021, as the company delivered total Q1 GAAP revenue of $1.8 billion, up 146.7% year-over-year.
Keep in mind that each one of this company’s businesses benefits from pandemic tailwinds, as more people are shopping online, playing video games, and using digital payment services than ever before. The company reports its today, Aug.17, before the bell, and it certainly wouldn’t be surprising to see another quarter of impressive results from the company.