2 Beaten-Down Stocks That Could Make You Richer

The formula for growing your wealth by investing in equities looks extremely simple on the surface. The first step is to buy quality stocks that can perform well over the long run. The second step is to wait for your holdings to compound your initial investment. Buy and wait; easy enough. However, there are caveats to this strategy. Here's an important one: It's not always easy to determine which stocks to buy, and the wrong choice could lead to substantial losses.

Some investors are particularly wary of corporations that have led to significant investing losses in recent years. Consider the following two stocks: fintech specialist Block (NYSE: SQ) and online freelance marketplace Fiverr International (NYSE: FVRR). Both companies have lagged the market by some margin in the past three years, but is that reason enough to avoid them? No, it isn't. In fact, both look like solid picks for long-term investors. Let me explain.

Block is best known for two core businesses. The first is Square (the company's former name), which helps small and medium-size businesses in various ways. Square offers slick and convenient point-of-sale systems, inventory management services, payroll, and more. The second arm of Block's business revolves around Cash App, its peer-to-peer (P2P) payment app that competes with traditional banks by offering a debit card, a savings account, direct deposits, stock and cryptocurrency trading, tax preparation services, and so on.

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Source Fool.com