My 5 Favorite Stocks Right Now

One of the best parts about being a contributor with The Motley Fool is that I get to spend lots of time learning about great companies. And to be sure, there are hundreds of public companies doing some really cool things. That said, it’s not necessarily a good investment opportunity just because it’s a cool business. Every idea needs to have its business model dissected to see if it can create shareholder value over time.

However, like cream in fresh milk, great investment ideas rise to the top over time. And I’d like to share my five creamiest stock choices with you today. In no particular order, these five are Latch (NASDAQ:LTCH), Pinterest (NYSE:PINS), Zoom Video Communications (NASDAQ:ZM), Magnite (NASDAQ:MGNI), and Peloton Interactive (NASDAQ:PTON).

Now I’ll present them in order from my fifth favorite to my first and explain why I think all five of these stocks are great buys right now.

5. Zoom Video Communications

Zoom is a videoconferencing tool, and its core product is called Meetings; it’s what most people likely think of first when Zoom is mentioned. The Meetings tool is primarily used by businesses of all sizes to allow their increasingly mobile workforces to communicate and collaborate. Meetings continues to entice new users to join the platform, so this core product from Zoom is doing well.

At a recent event, Zoom management detailed three other avenues for future growth, and this has me excited.

First is a product called Zoom Phone. This isn’t a phone for handling incoming and outgoing calls but rather an operating system for a company’s internal phone infrastructure. Right now, less than 4% of Zoom’s 500,000 customers have signed up. However, in the second quarter of its fiscal 2022, 76% of Phone revenue came from customers who already had Meetings. This suggests that Zoom can continue to grow its business by upselling its Phone product to existing customers.

Speaking of upselling, Zoom can also grow via Zoom Rooms. This is a product that leverages Zoom’s strengths in videoconferencing and combines it with traditional conference room necessities. Again, less than 5% of current Zoom customers are deploying Rooms, but it could become a necessity for many. According to a survey by Accenture, 83% of workers prefer hybrid work. And according to research firm Frost & Sullivan, there are over 90 million meeting places around the world, and Zoom believes it can digitize all of them with Rooms. 

Finally, Zoom Apps might be the greatest optionality lever the company has. Essentially, the company is allowing third parties to build apps that integrate directly with its video platform. For example, DocuSign is an early adopter. Zoom has reserved $100 million to fund third-party app developers, and it has no idea where it could go. This is less than 2% of the company’s cash but could open up doors it wasn’t anticipating. For example, management…