Though they may not be the most exciting businesses around, an investment in these 3 dull stocks can bring big rewards to the patient investor.
Some things in life, like waffles and roller-coasters, should never be boring. Others, such as a transatlantic plane journey or a visit to the dentist, are probably better off without too much excitement.
We can add certain stocks to that list, too.
In his classic book, ‘One Up On Wall Street’, investor Peter Lynch wrote that he actively seeks out boring stocks with dull names as part of his investing strategy:
“A company that does boring things is almost as good as a company that has a boring name, and both together is terrific.”
Here are three companies that best demonstrate how boring can often be best.
DocuSign (NASDAQ: DOCU) is a SaaS company that provides electronic signature technology for facilitating exchanges of documents. Sounds thrilling, right?
Although it’s unlikely to gain a cult following any time soon, the company, which went public in April of last year, has managed to become a permanent fixture in the operations of countless businesses. Indeed, DocuSign’s technology is already used by 18 of the top 20 global pharmaceutical companies and 7 of the top 10 technology companies.
With more than 500,000 paying customers and hundreds of millions of users under its belt, DocuSign has turned something as mundane as the process of signing a contract into a high-growth business that makes up in growth-potential what it lacks in glamour.
2. Markel Corp.
Like DocuSign, Markel (NYSE: MKL) will never win a prize in the excitement department, but it offers something that faddish start-ups rarely can: a history of incredible returns.
Markel, in its own words, is a — wait for it — “holding company for insurance, reinsurance, and investment operations around the world.” It has performed so well in this space that it has acquired the nick-name ‘Baby Berkshire’.
If insurance doesn’t rock the boat for you, then how about this? Markel’s stellar reputation comes from its track-record of consistently beating the S&P 500, particularly in recent years. Indeed, if you’d bought $1,000 in Markel stock when the company was founded in 1986, your investment would be worth more than $100,000 today.
3. Veeva Systems
Founded in 2007, Veeva Systems (NYSE: VEEV) provides cloud-based software that makes life-science companies more efficient.
Read that sentence again. “Cloud-based software.” “Life-science.” “Efficient.” That’s right, Veeva is out there at the cutting-edge of monotony.
Sometimes described as the Salesforce(NYSE: CRM) of pharma, Veeva was actually co-founded by Peter Gassner, who built Salesforce’s customer relationship management (CRM) platform, which is now the largest enterprise cloud-computing platform in the world.
Veeva has achieved a similar level of dominance in its own space, with the company’s CRM being used by about 80% of the global pharma and life sciences industry.
As growth inevitably slows down in its core business, Veeva is investing in its highly-successful Vault content management products, which are expected to see growth of 40% by the end of the fiscal year. With shares recently reaching all-time highs, it looks like the future may indeed be exciting for Veeva.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in DocuSign and Veeva Systems . Read our full disclosure policy here.