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When investing in equities, even a relatively modest initial sum such as $500 can go a long way, provided investors pick the right stocks and continue adding to their positions regularly. Let’s address the first part of this equation: Picking the right stocks. With myriads of options to choose from, it’s not always an easy thing to do.

Here are two companies to consider: Sarepta Therapeutics (NASDAQ: SRPT) and Shopify (NYSE: SHOP). These two growth stocks are worth holding onto for five or more years. Here is why.

1. Sarepta Therapeutics

Sarepta Therapeutics is a biotech company that focuses on developing medicines for rare diseases. The company has four approved products, all of which treat Duchenne muscular dystrophy (DMD) — a progressive genetic illness that leads to muscle degeneration and an extremely shortened lifespan. Sarepta Therapeutics’ portfolio of DMD therapies is generating consistently growing sales. In the second quarter, the company’s revenue rose by about 12% year over year to $261.2 million.

Things are about to get even better. Sarepta’s most recent therapy approval in June was its most important yet. The treatment in question is called Elevidys, the first gene therapy approved by the Food and Drug Administration to target the underlying causes of DMD. Elevidys is only indicated to treat patients ages 4 to 5 for now.

The therapy’s list price is $3.2 million, and while that may sound high, the company’s analysis shows that based on the health benefits that Elevidys will have for patients, it would still be cost-effective for insurers. In addition, the company has said it expects “that nearly all infusions of Elevidys will be subject to a statutory discount.” In other words, few will be paying the full list price.

Still, with the anticipated label expansions that will allow a much wider range of DMD patients to undergo the treatment, Sarepta and its partner on this program, Roche, estimate that Elevidys could achieve peak annual sales of $4 billion. Sarepta should maintain its revenue momentum in the mid-term thanks to Elevidys. It will also allow the company to move closer to profitability. The company’s net loss in the second quarter was $0.27 per share, better than the net loss of $2.65 per share it reported in the year-ago period.

What’s even more important is that Sarepta is demonstrating its ability to develop novel therapies for difficult-to-treat diseases. It is now arguably the leader in the small DMD niche. And its pipeline features other candidates that target this disease. In total, the biotech has more than 40 pipeline programs. Sarepta Therapeutics may not yet be profitable, but the company looks like a rising star in the biotech industry, and that’s one of the things that makes the company attractive.

Biotech investors can get four shares of Sarepta for $500. For those who are focused on the long game, that would likely be money well spent.

2. Shopify

Over the past year, e-commerce giant Shopify has made several important moves. After having held its prices steady for more than a decade, it increased them at the beginning of 2023. The higher fees Shopify now charges its merchants arguably reflect changing economic conditions. The tech giant also decided to exit its logistics business — a move that will boost its bottom line over the long run.

More recently, Shopify announced a partnership with Amazon. The latter will soon release an app allowing Shopify’s U.S. clients who use Amazon’s fulfillment network to add the Buy with Prime option to their digital checkouts. This will enable Amazon Prime members to benefit from its speedy delivery options while shopping with merchants whose platforms are powered by Shopify. All these changes could make Shopify’s business more robust.

The company is already delivering solid financial results, at least on the top line. In the second quarter, Shopify’s revenue increased by 31% year over year to $1.7 billion. Shopify remained unprofitable with a net loss per share of $1.02, slightly worse than the $0.95 reported in the year-ago period. Despite the persistent red ink on the bottom line, Shopify remains an excellent long-term bet.

The company has carved out a niche in the competitive e-commerce sector. Its platform facilitated about 10% of U.S. e-commerce sales in terms of gross merchandise volume as of the end of 2022. Shopify also benefits from a competitive moat in the form of high switching costs — building an online storefront from scratch (and attracting customers to it) requires considerable investments in time and money. A business that has done so once with Shopify’s platform is unlikely to want to switch providers and then have to do that work all over again.

Lastly, Shopify should benefit from the trends in the e-commerce industry, which is still in high-growth mode. With the stock trading at just under $64, investors with $500 to deploy now can get seven shares with change to spare.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Prosper Junior Bakiny has positions in and Shopify. The Motley Fool has positions in and recommends and Shopify. The Motley Fool recommends Roche Ag. The Motley Fool has a disclosure policy.

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