Two Affordable Expansion Stocks That Prosperous Billionaires Are Purchasing
In the current market landscape, major indexes are flirting with new highs, pushing valuations beyond historical norms. The S&P 500's P/E ratio sits pretty at around 30 - approximately double its historical average. Finding reasonably priced growth stocks in 2025 is becoming quite the challenge, but the retail sector is turning up some gems. Two such retail growth stocks that are garnering interest from big-time investors are Coupang and Skechers.
1. Coupang
South Korea's leading online retail company, Coupang, is rapidly expanding and has caught the attention of two influential billionaires, Howard Marks of Oaktree Capital Management and Chase Coleman of Tiger Global Management. Coupang rebounded last year following impressive financial results, with revenue growing 20% YOY (year over year) in Q3, excluding its recent acquisition of luxury goods marketplace Farfetch.
Coupang boasts a commanding 40% share of South Korea's e-commerce market, which Research and Markets projects will expand from $124 billion in 2023 to $182 billion by 2028. The active user count stood at 22.5 million last quarter, demonstrating a 11% YOY increase.
But Coupang's dependency on the South Korean market poses a risk; it must prove its business model can thrive in other geographies to generate sustainable returns over the long term. To this end, Coupang has already expanded into new markets like Taiwan, Singapore, China, India, and Europe.
Investors like Coleman and Marks may be drawn to Coupang's unique delivery system, which promises rapid delivery within hours to customers in densely populated cities. Their strong belief in Coupang's potential is further supported by its impressive performance in Taiwan, where the company is investing heavily to drive further growth.
Coupang's current P/S (price-to-sales) multiple of 1.6 is notably lower than Amazon's historical range during its growth years, signaling potential for future gains.
2. Skechers
Top footwear brand Skechers boasts double-digit earnings growth but trades at a relatively paltry 16 times earnings. After recently acquiring a new position, Skechers has won the favor of Andreas Halvorsen of Viking Global Investors.
Despite consistent revenue growth at an annualized rate of 14% over the past 10 years, Skechers stock has continually been undervalued. The company has developed a solid footwear brand over the years based on style, comfort, and affordability. Skechers' recent Q4 earnings saw sales increase by 13% YOY, with earnings jumping 26%.
The brand's performance footwear expansion, with notable athlete signings in basketball, golf, and baseball, is likely to raise brand awareness. Despite concerns over U.S. tariffs impacting Chinese and Vietnamese imports, Viking Global Investors seems confident in Skechers' ability to adapt its supply chain as it has in the past.
All in all, the stock's potential for growth at a reasonable price continues to pique investors' interest. With earnings growth projected at 16% in 2025, Skechers investors could see returns on par with the company's earnings growth, if not surpass them, as the P/E ratio narrows towards the S&P 500 average.
- In the context of investing, finding reasonably priced growth stocks beyond the tech industry can be especially challenging given the current market conditions, where major indexes are reaching new highs and pushing valuations beyond historical averages.
- With the South Korean e-commerce market projected to reach $182 billion by 2028, Coupang's lower P/S multiple compared to Amazon's historical range during its growth years might make it an attractive choice for investors seeking potential gains in the finance sphere.
