3 actions that turned $6,000 into more than $1 million in 20 years

Investing in promising and emerging growth stocks can lead to significant returns for buy-and-hold investors. You don’t have to invest a fortune in a growth stock to make a lot of money — if you pick the right one — but it can take a lot of patience.

Apple (NASDAQ:AAPL), Netflix (NASDAQ: NFLX)and Reservation Holdings (NASDAQ: BKNG) each turned four-figure investments into more than $1 million over the course of several decades. Here’s how they did so well and what a $6,000 investment in these stocks 20 years ago would be worth to an investor who held out.

Apple: $2.5 million

Steve Jobs unveiled the first iPhone in 2007 and since then it has been a monumental change for Apple’s business. Not only have Apple’s loyal customers come back again and again for new iterations of the device over the years, but it’s been the primary hardware foundation upon which a huge and growing ecosystem of services has been built. While iPhone and iPad sales are still the company’s mainstay, it is making a growing share of service revenue, and these could continue to be a growth catalyst for years to come.

Over the past two decades, Apple has been a phenomenal growth stock to own, turning a $6,000 investment 20 years ago into $2.5 million today.

Despite its rise to one of the world’s most valuable companies, Apple stock still isn’t wildly expensive. It’s trading at 34 times its trailing earnings, and with AI-capable phones coming soon, there’s still reason to remain excited about the company’s growth prospects.

Netflix: $1.8 million

Netflix has reconfigured itself several times over the past two decades. In the early 2000s, his video rental business was based on mailing physical DVDs to customers. He then moved into streaming and curated content from a wide variety of studios. But as more of these companies launched their own streaming services, Netflix turned again to creating its own content. Although it still has movies and shows from other entertainment companies, it is no longer so dependent on them.

And while many other content producers struggle to make their own streaming services profitable, Netflix has succeeded. While consumers may not be happy about the subscription price increases, they have paid off; Netflix’s profits have grown at even faster levels than Apple’s.

A $6,000 investment in Netflix 20 years ago would be worth $1.8 million today. The stock is a little expensive, trading at more than 42 times trailing earnings. But for a top streaming company, that may be a justified premium to pay, especially as it expands deeper into ad-supported plans, which will likely open up even more growth opportunities for Netflix.

The story continues

Bookings: $1.1 million

Booking Holdings has become one of the largest travel technology companies in the world. Its portfolio includes many popular travel booking sites including Priceline.com, Kayak.com, Cheapflights.com and others to complement its flagship site, Booking.com.

The demand for travel continues to grow with population growth, making travel stocks quite attractive investments to buy and hold, and Booking Holdings is no exception. Although the pandemic has seriously affected the company’s bottom line, Booking Holdings has bounced back and its growth prospects remain promising.

A $6,000 investment in Booking Holdings two decades ago would be worth about $1.1 million now. Trading at 27 times earnings and a price-to-earnings-growth (PEG) multiple of just 1.1, this is the best-rated growth stock on this list.

Should you invest $1,000 in Apple right now?

Before buying Apple stock, consider the following:

The Motley Fool Stock Advisor the analyst team has just identified what they think they are 10 best stocks for investors to buy now…and Apple wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $769,685!*

Stock advisor provides investors with an easy-to-follow blueprint for success, including portfolio construction guidance, regular updates from analysts, and two new stock picks every month. The Stock advisor the service has more than four times return of the S&P 500 since 2002*.

See the 10 stocks »

*The stock advisor returns starting August 26, 2024

David Jagielski has no position in any of the listed stocks. The Motley Fool has positions in and recommends Apple, Booking Holdings and Netflix. The Motley Fool has a disclosure policy.

3 actions that turned $6,000 into more than $1 million in 20 years was originally published by The Motley Fool